Exhibit 1 - Operations and Maintenance Unit MOU — City Council and Concurrent Authorities, September 15, 2026

CITY OF STOCKTON

MEMORANDUM OF UNDERSTANDING

OPERATIONS AND MAINTENANCE UNIT

MUNICIPAL UTILITIES DEPARTMENT
Operating Engineers' Local 3, AFL-CIO and representatives of the City of Stockton have met and conferred in good faith regarding wages, hours and other terms and conditions of employment of employees in the representation unit identified in Section 1, have exchanged freely information, opi nions and proposals and have endeavored to reach agreement on all matters relating to the employment conditions and employer-employee relations of such employees.

This Memorandum of Understanding (MOU) is entered into pursuant to the Meyer s- Milias-Brown Act (Government Code sections 3500-3510) and has been jointly prepared by the parties.

This MOU shall be presented to the Stockton City Council as the joint recommendations of the undersigned for salary and benefit adjustments for the period commencing July 1, 2026 and ending June 30, 2029.

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CITY OF STOCKTON

TABLE OF CONTENTS
Section 1. Recognition ................................ ................................ ................................ .............. 1 Section 2. Union Rights ................................ ................................ ................................ ............. 1 Section 3. Probation ................................ ................................ ................................ .................. 4 Section 4. Layoff ................................ ................................ ................................ ....................... 5 Section 5. Reemployment ................................ ................................ ................................ ......... 7 Section 6. Discipline ................................ ................................ ................................ .................. 8 Section 7. Grievance Procedures ................................ ................................ .............................. 9 Section 8. Leaves ................................ ................................ ................................ ....................12 Section 9. Days and Hours of Work ................................ ................................ .........................19 Section 10. Overtime ................................ ................................ ................................ ................20 Section 11. Holidays ................................ ................................ ................................ ................24 Section 12. Compensation and Allowance Other Than Base Salary ................................ ........26 Section 13. Insurance Plans and Retirement Benefits ................................ .............................. 31 Section 14. Salaries ................................ ................................ ................................ .................34 Section 15. Severability of Provisions ................................ ................................ ......................38 Section 16. Past Practices and Existing Memoranda of Understanding ................................ ...39 Section 17. Scope of Agreement ................................ ................................ .............................. 39 Section 18. Duration of Agreement ................................ ................................ ..........................39 Section 19. Maintenance of Operations/City Rights ................................ ................................ .39 Section 20. GPS Policy, Rest Periods, New Standby List ................................ ....................... 40 Appendix A. Salary Schedule Effective September 20, 2026 ................................ ...................42 Appendix B. Side-Letter of Agreement Exhibit A & B Employees ................................ .............44 Appendix C. Side-Letter of Agreement Longevity Incentive ................................ ......................51 Appendix D. Rates of Pay ................................ ................................ ................................ ........54

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OPERATIONS AND MAINTENANCE UNIT SUCCESSOR MOU
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Section 1. Recognition
Operating Engineers' Local 3, AFL -CIO, hereinafter referred to as the "Union," is the recognized employee organization for the Operations and Maintenance (O&M) Unit, certified pursuant to the Employer-Employee Relations Ordinance (Stockton Municipal Code §§ 2-200, et seq.).

Section 2. Union Rights

2.1 Union Membership Dues and Payroll Deductions

(a) The City will deduct the monthly Union membership dues, initiation fees, general assessments and payments for membership benefits programs sponsored by the Union from the salary or wages of all employees who voluntarily authorize such deductions, as certified in writing by the Union to the City, and pay such amounts to the Union.

1. All employee requests to cancel or change membership dues deductions shall be directed to the Union.

2. The City shall rely upon written notification from the Union for any and all employee requests to cancel or change payroll deductions for membership dues.

3. The Union is responsible to obtain and maintain voluntary written authorization for membership dues deductions.

4. Membership dues deductions shall automatically renew unless written notice is provided by the authorized representative of the Union certifying a change in membership dues.

5. The City shall honor any changes to membership dues deduction amounts provided by the Union.

6. The Union is not required to provide a copy of individual employee authorizations to the City unless a dispute arises about the existence or terms of the authorization.

7. Deduction notification will be provided to [email protected]

8. Changes and/or cancellations received by the City prior to the 15 th of the month will be processed no later than the first pay period of the second month.

(b) Hold Harmless Provision

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The Union shall indemnify, defend, and hold the City harmless against any claims made and/or any suit against the City which may arise as a result of its deductions for membership dues or other programs sponsored by the Union.

2.2 New Hire Employee Orientation and Information Requirements

(a) The City shall provide the Union i) not less than ten (10) days’ notice in advance of new hire employee orientation, and ii) within thirty (30) days of hire or by the first pay period of the month following hire , a list containing the following information on file from the City’s Human Resources database system:

1. Name;

2. Job title;

3. Department;

4. Work location;

5. Personal cellular telephone numbers, including work and home;

6. Personal email addresses as provided by new hire employee; and

7. Home address.

The above information shall be updated and provided to the Union at least every thirty (30) days for all bargaining unit members.

2.3 Use of City Facilities

(a) The Union shall be allowed by the department in which it represents employees' use of space on available bulletin boards for communications having to do with official Union business, such as times and places of meetings, provided such use does not interfer e with the needs of the department. The Union may submit to the City Employee Relations Officer written communications having to do with official Union business for distribution by the City to identified Union shop stewards. Distribution may be made by e-mail.

(b) Any representative of the Union shall give notice to the department head or designated representative when contacting department employees on City facilities during the duty period of the employees, provided that solicitation for membership or other inter nal Union business shall be conducted during the non-duty hours of all employees concerned. Pre -arrangement for routine contact may be made with individual department heads and when made shall continue until revoked by the department head.

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(c) City buildings and other facilities may be made available for use by City Employees of the Union or their representatives in accordance with such administrative procedures as may be established by the City Manager or depart - ment heads concerned.

2.4 Advance Notice

Except in cases of emergency, reasonable advance written notice shall be given to the Union if affected by any ordinance, resolution, rule , or regulation directly relating to matters within the scope of representation proposed to be adopted by the City and shall be given the opportunity to negotiate if requested with the designated management representatives prior to adoption. The Union shall have fourteen (14) business days to request a meet and confer. If the Union fails to request a meet and confer within this time period, it shall be deemed to have waived its right to meet and confer.

In cases of emergency when the foregoing procedure is not practical or in the best public interest, the City may adopt or put into practice immediately such measures as are required. At the earliest practicable date thereafter , the Union shall be provided with the notice described above and be given an opportunity, if requested, to negotiate changes to said notice with the management representatives designated by the City Manager.

2.5 Attendance at Meetings by Employees

Employees who are official representatives or unit representatives of the Union shall be given reasonable time off with pay to attend meetings with City management representatives where matters within the scope of representation or grievances are being considered. Such employee representatives shall submit a request for an excused absence to their respective department heads in a manner satisfactory prior to the scheduled meeting whenever possible. Time spent for these purposes while a representative is not scheduled to work shall not be compensated by the City and shall not be considered as hours worked. Except by mutual agreement, the number of the employees excused for such purposes shall not exceed five (5) per recognized bargaining unit. For MOU negotiation meetings, the number of employees excused for such purposes shall not exceed six (6) per recognized bargaining unit.

O&M Time Bank. Upon request by O&M once per calendar year, each employee must contribute up to one (1) hour of vacation time to maintain a bank of time to be used by O&M officers, directors, and members for O&M business that occurs during normal work hours, for which paid release time does not apply. Time b ank hours used will not be considered as hours worked. The use of O&M Time Bank must be authorized by an O&M Officer, or O&M director. Members must submit EXHIBIT 1

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the time-off request in advance and receive supervisor approval to attend O&M business that occurs during normal work hours. The total amount of release time in the bank, including any carryover, will at no time exceed five hundred (500) hours. The City’s administration and processing of these contributions will be implemented as soon as administratively possible after ratification of this MOU.

This time bank may be used by representatives who attend new hire orientations at the City. The City will provide the Union current time bank balance in February and August of each calendar year.

2.6 Maintenance of Membership

All employees in the O&M unit who are members of the Union, tendering periodic dues at the execution of this agreement, and all employees who thereafter become members of the Union shall, as a condition of employment, pay dues to the Union for the duration of this MOU, and each year thereafter. For a period of thirty (30) days prior to January 1, 2009 , and thirty (30) days prior to any January 1, thereafter, any employee in the aforementioned unit who is a member of the Union shall have the right to withdraw from the Union discontinuing dues payments and retain employment in the City . Said withdrawal shall be communicated by the employee in writing to the City. The provisions of this section shall be operative only to the extent that they are permissible under California law.

2.7 Contract Ratification

Ratification votes for Contract will be handled on City time during the day.

Section 3. Probation

3.1 Purpose

The probationary period shall be utilized for closely observing the employee's work, for securing the most effective adjustment of a new employee to a position, and for rejecting any probationary employee whose performance does not meet the required standards of work.

3.2 Original Entrance and Promotional Positions

All original appointments shall be tentative and subject to a probationary period of one (1) year with a review completed after six ( 6) months from original appointment. Promotional appointments shall be subject to a probationary period of six ( 6) months. The probationary period for original and promotional appointments will not be extended.

3.3 Retention/Rejection of Probationer

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At the end of the probationary period, if the service of the probationary employee has been satisfactory to the appointing authority, the appointing authority shall file with the Director of Human Resources a statement in writing to such effect and stating that the retention of such employee in the service is desired. The City will make a good faith effort to notify a probationary employee two (2) weeks before the end of the probationary period whether or no t regular status is granted; however, a failure on the part of the appointing authority to file such a statement at the end of the probationary period shall not constitute a rejection of the probationer as defined in Civil Service Rules.

During the probationary period an employee may be rejected at any tim e by the appointing authority. Any employee rejected during the probat ionary period following a promotional appointment, shall be reinstated to the position from which promoted unless charges are filed and the employee is discharged in the manner provided in section 6 of this MOU and in the Civil Service Ordinance and Civil Service Rules, which are consistent therewith.

3.4 Alcohol and Drug Testing . All employees hired into original and reemployed appointments in safety-sensitive positions identified by the City must pass a drug and alcohol screening prior to being offered City employment. This shall include non-represented part-time, seasonal, provisional, and temporary appointments.

Section 4. Layoff

4.1 Layoff

Any employee may be laid off by an appointing authority in the event of the abolition of the employee's position by the City Council, or if a shortage of work or funds requires a reduction in personnel.

4.2 Layoff Scope

(a) Layoffs shall be within departments of the City.

(b) Departments of the City are defined as follows:

(1) Administrative Services
(2) City Attorney
(3) City Auditor
(4) City Clerk
(5) City Manager
(6) Community Development
(7) Community Services
(8) Economic Development
(9) Fire
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(10) Human Resources
(11) Information Technology
(12) Municipal Utilities
(13) Police
(14) Public Works

4.3 Notice of Layoff

The City will give advance written notice of at least one (1) pay period to employees who will be laid off.

4.4 Precedence by Employment Status

(a) No regular status employees shall be laid off while employees working in an extra help, seasonal, temporary, provisional, or probationary status are retained in the same classification as such regular status employee. The order of layoff among employees not having regular status shall be according to the following categories:

(1) extra help or seasonal
(2) provisional
(3) temporary
(4) probationary

Layoffs shall be by job classification according to reverse order of seniority as determined by total service in the City, except as specified above. For the purpose of this procedure part -time classes shall be considered as separate from regular full-time classes.

The following provisions shall apply in computing total continuous service:

(1) Time worked in a regular status or probationary
status shall count as service.
(2) Time spent on military leave shall count as
service in the event the leave was taken
subsequent to entry.
(3) Time worked in an extra help, seasonal,
provisional, temporary, grant or other limited
term status shall not count as service.

If two (2) or more employees have the same seniority, order of seniority shall be determined by their respective ranking on the eligibility list for hire.

If two (2) or more employees have the same seniority, but were not hired from a ranked eligibility list, the order of seniority shall be determined by lot.

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If two (2) or more employees have the same seniority, but were hired from separate ranked eligibility lists, the order of seniority shall be determined by lot.

(b) Any employee in the O&M Unit who is laid off may complete a City employment application for any position currently staffed by a part time, provisional, or temporary employee. The Human Resources Department will evaluate the employment application. If the laid off employee meets the minimum qualifications of that position, they shall have the option of displacing the part time, provisional, or temporary employee.

4.5 Employee Options

Employees laid off shall have any of the following choices:

(a) Displacing the employee in the same department and in the same or clearly comparable classification as determined by the Director of Human Resources as having the least (total service) seniority. This option shall be exercised before any other option.

(b) Taking a voluntary demotion within the department to a classification in which the employee had prior regular status, thus displacing the employee working in the classification who has the least (total service) seniority.

4.6 Health and Welfare Benefits during Layoff

Regular status employees who are laid off will have an option of maintaining their existing health and welfare benefits for thirty -six (36) months from the date of layoff, provided timely payments of the premiums by the employee are made to the City, according to City regulations, and provided the employee otherwise meets the requirements of Federal and State regulations.

Section 5. Reemployment
(a) The name of each employee who is laid off in accordance with section 4 shall be placed at the head of the eligibility list for the class of positions which that employee held, and shall be given preference in filling vacancies in that class.

(b) An employee laid off in accordance with this section shall be placed on the eligibility list or lists for any lower or comparable class or classes in the same department, provided that the appointing authority and the department head in charge of this lower or comparable class determine that the employee is competent to perform the duties thereof in strict accordance with the class specifications. This right of a laid off employee shall remain effective for two (2) years from the date of latest separation from the service. The employee shall not be pla ced on said EXHIBIT 1

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eligibility list or lists without first submitting a written request. Employee's place on said list or lists shall be at the head of the eligibility list for the class of positions for which qualified as hereinabove set forth and shall be given preference in filling vacancies except for those persons placed on said list or lists of reemployment in the same positions previously held. An employee who waives reemployment to a full time position three (3) times shall have their name removed from this reemployment list unless mutually agreed to by the Department and employee.

Upon certification for appointment to a new position never having been held by this employee, the probationary period must be completed as required in this MOU.

Section 6. Discipline
Disciplinary action, including discharge, suspension, reduction in pay or demotion, may be taken against any employee for cause.

6.1 Pre-disciplinary Rights

An employee facing potential disciplinary action will be entitled to the following pre- disciplinary rights:

(a) Notice of proposed discipline.

(b) Date(s) proposed discipline will be effective.

(d) Seven (7) calendar days in which an employee or the representative may respond either orally or in writing to the department head.

(e) The employee must be provided with any written mate rials, reports and documents upon which the action is based.

6.2 Administrative Leave

The City may place an employee on administrative leave pending the completion of the pre-disciplinary process.

6.3 Provisions

The appointing authority may discharge, suspend or demote any employee in the classified service provided the Stockton Municipal Code provisions and the rules and regulations of the Civil Service Commission and any applicable provisions of law are followed. Such provisions allow the employee suspended, demoted or dis- charged to appeal such action. The employee may take only one (1) of the EXHIBIT 1

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following actions:

(a) File no appeal.

(b) File an appeal with the Civil Service Commission within ten (10) calendar days of written notification of the action. (Such filing will foreclose use of the grievance procedure.)

If the employee fails to do (b) or (c) above within the prescribed time frames, these rights will have been waived.

All verbal reprimands and written reprimands shall be removed from the employee’s record after a period of one (1) year if there has been no reoccurrence of the infraction and the employee has a good work record. All other disciplinary records shall be removed from an employee’s work record after two (2) years if there has been no reoccurrence of the infraction and th e employee has a good work record.

Section 7. Grievance Procedures

7.1 Definition

A grievance is any dispute which involves the interpretation or application of those rules, regulations and resolutions which have been, or may hereafter be, adopted by the City Council to govern personnel practices and working conditions, including such rules, regulations and resolutions as may be adopted by either the City Council or the Civil Service Commission to affect Memoranda of Understanding which result from the meeting and conferring process. Day – shall mean day(s) in which the City’s Human Resources Office is open for business.

7.2 Filing Deadline

(a) No grievance involving demotion, suspension, discharge or other employment penalty will be entertained unless it is filed in writing with the Director of Human Resources within ten (10) working days of the time at which the affected employee received written notification of such action. All other grievances must be filed within thirty (30) working days from the time the employee knew or had reason to know of the facts giving rise to the grievance.

(b) With written consent of the City Manager or their designee and the Union Business Agent or their designee, time limits may be extended and/or Steps 1, 2 and/or 3 of the Grievance Procedure waived.

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7.3 Grievance Processing

(a) Step 1 - Departmental Review. Any employee claiming to have a grievance may discuss the complaint with such management official in the department where employed as the department head may designate. If the issue is not resolved within the department within twenty (20) working days from the day of presentation or if the employee elects to submit the grievance directly to the Union recognized as the representative of that employee's classification, or if the employee/Union official notifies the Director of Human Resources, in writing, that a grievance exists, the procedure hereinafter specified may be invoked. An email will suffice as a formal submission of a Step one (1) Grievance. The Union agrees to state in the subject line of the email “Grievance.”

(b) Step 2 - Director of Human Resources Review. If the employee is not satisfied with the response at Step one (1), then the employee may appeal the grievance to the Director of Human Resources within twenty (20) working days of the receipt of written response at Step one (1). Such appeal must state with particularity: 1) the specific policy, rule or provision which is alleged to have been violated; 2) the statement of facts comprising the violation; and 3) the requested remedy. The Union may file and process grievance(s) on behalf of the specifically named employee. The Director of Human Resources shall have twenty (20) working days to investigate the issues, meet with the complainant, and attempt to reach a satisfactory resolution of the problem. No grievance may be processed under the following two (2) paragraphs which has not first been filed and investigated in accordance with this paragraph, except for the resolution of compensation complaints.

(c) Step 3 - Arbitration. If the parties are unable to reach a mutually satisfactory accord on the grievance at Step two (2), within twenty (20) calen dar days either the Union or the City may require that the grievance be referred to an impartial arbitrator mutually selected by the parties, or if the parties are unable to mutually agree, from a list of seven (7) arbitrators provided by the State Conciliation Service.

The arbitrator shall be chosen by the alternative strike method, with first choice being determined by lot. The fees and expenses of the arbitrator and of a court reporter shall be shared equally by both parties. Each party, however, shall bear the cost of its own presentation, including preparation and post hearing briefs, if any.

(d) Effect of Decision. Decisions of arbitrators on matters properly before them shall be final and binding on the parties hereto except as provided other wise herein.

7.4 Scope of Arbitration

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(a) No arbitrator shall entertain, hear, decide or make recommendations on any dispute unless such dispute involves a position in a unit represented by the Union and unless such dispute falls within the definition of a grievance as set forth in paragraph 8.1.

(b) Proposals to add to or change this MOU or written agreements or addenda supplementary hereto shall not be arbitrable and no proposal to modify, amend or terminate this MOU, nor any matter or subject arising out of or in connection with such proposal, may be referred to arbitration under this Section. No arbitrator selected pursuant to this Section shall have the power to amend or modify this MOU or written agreements or addenda supplementary hereto or to establish any new terms or conditions of employment.

No changes in this MOU or interpretations thereof (except interpretations resulting from arbitration proceedings hereunder) will be recognized unless agreed to by the Director of Human Resources and the Union.

7.5 Other Provisions

If the Director of Human Resources or City Manager, in pursuance of the procedures outlined above, resolve a grievance which involve s suspension or discharge, they may agree to payment for lost time or to reinstatement with or without payment for lost time, but in the event the dispute is referred to arbitration and the arbitrator finds that the City had cause to take the action complai ned of, the arbitrator may not substitute his judgment for the judgment of management and if the findings are that the City had such right, the arbitrator may not order reinstatement and may not assess any penalty upon the City.

Complaints which allege the employee is not being compensated in accordance with the provisions of this MOU shall be considered as grievances and processed pursuant to section 7.3. Any other matters of compensation are to be resolved in the meeting and conferring process and if not detailed in the MOU which results from such meeting and confer ring process shall be deemed withdrawn until the meeting and conferring process is next open for such decision. No adjustment shall be retroactive for more than one-hundred and eighty (180) calendar days from the date upon which the complaint was filed.

Specified time limits may be modified only in writing. All appeals and responses must be provided in writing.

A grievant will be provided release time without loss of pay for all required meetings with management. The City cannot discriminate or retaliate in any manner against an employee for filing a grievance or exercising rights under this section.

The provisions of this section shall not abridge any rights to which an employee EXHIBIT 1

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may be entitled under the Stockton Municipal Code and/or Civil Service Rules and Regulations, nor shall it be administered in a manner which would abrogate any power which, under the Stockton Municipal Code, may be within the sole province and discretion of the Civil Service Commission.

All grievances of employees in units represented by the Union shall be processed under this section. If the Stockton Municipal Code and/or the Civil Service Rules and Regulations requires that a differing option be available to the employee, no action under paragraph (c) of Subsection 7.3 above shall be taken unless it is determined that the employee is not utilizing such option.

No action under paragraph (c) of Subsection 7.3 above shall be taken if action on the complaint or grievance has been taken by the Civil S ervice Commission or if the complaint or grievance is pending before the Civil Service Commission.

If any award by an arbitrator requires action by the City Council or the Civil Service Commission before it can be placed in effect, the City Manager and the Director of Human Resources will recom mend to the City Council or the Civil Service Commission, as appropriate, that it follow such award.

Section 8. Leaves

8.1 Vacation Leaves

Employees accrue vacation leave per pay period with pay in accordance with the following schedules:

(a) FLSA Non-Exempt Employees

Months of Continuous Service Hours Per Pay Period
Less than eighteen (18) 3.08
Eighteen (18) or more but less
than ninety (90)

4.15 Ninety (90) or more but less than
180

5.54 180 or more but less than 300 7.27
More than 300 Additional 0.27 hours for each
additional year of completed
service in excess of 25 years

(b) FLSA Non -Exempt Employees Maximum Vacation Accrual . Employees reaching the maximum hours will stop accruing additional hours until they are below the caps listed below.

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Under 1.5 years 120 hours

1.5 - 7.5 years 240 hours

7.5 - 15 years 280 hours
15 – 25 years 320 hours
26 years 328 hours
27 years 336 hours
28 years 344 hours
29 years plus 7 hours each additional year

Months of Continuous Service Hours Per Pay Period
Less than eighteen (18) 4.62
Eighteen (18) or more but less
than ninety (90)

5.69 Ninety (90) or more but less than
180

7.23 180 or more but less than 300 8.81
More than 300 Additional 0.27 hours for each
additional year of completed
service in excess of 25 years

(d) FLSA Exempt Employees Maximum Vacation Accrual. Employees reaching the maximum hours will stop accruing additional hours until they are below the caps listed here.

Under 1.5 years 200 hours

1.5 – 7.5 years 320 hours

7.5 – 15 years 360 hours
15 – 25 years 400 hours
25 years 408 hours
26 years 416 hours
27 years 424 hours
28 years plus 7 hours each additional year

(e) Vacation Scheduling . Vacation leaves shall be scheduled with due consideration for the wishes of the employee and so as to not interfere with the normal operation of the City’s business.

(f) Holiday during Vacation. If any such paid holidays fall within an employee's vacation leave, the employee will not be charged vacation accrual for that day.

(g) Vacation Sellback.

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During the month of December, employees may make an irrevocable election to cash out up to forty (40) hours of vacation leave for the succeeding calendar year.

Employees that cash out a portion of their vacation accrual will be paid on the first check in D ecember of the following calendar year. Payments are subject to all applicable payroll taxes and withholding.

(h) Vacation Cash Out Upon Separation

An eligible employee separating from City service for any reason who has unused vacation time shall be paid for such vacation time up to the effective date of the last day of employment with the City. Payment for unused vacation shall be made at the straight time rate of pay. Payment for the unused vacation hours shall be paid post separation date at no later than the second regularly scheduled pay period pay date following separation.

8.2 Sick Leave

(a) Accrual. All regular status full-time employees, except provisional , andtemporary employees, shall accrue sick leave at the rate of eight (8) hours for each month of completed service.

All regular status employees, except provisional , and temporary employees, scheduled to work less than a full month shall accrue sick leave on a prorated basis. Unused sick leave shall accrue from year to year. Employees shall continue to accrue sick leave while off duty on authorized sick leave; provided, however, an employee shall not accrue sick leave during any leave or leaves of absence without pay granted to the employee.

(b) Usage. Employees are entitled to sick leave pay for those days which the employee would normally have worked, to a maximum of the hours accrued, described as:

Preventive medical, dental, optical care, illness, injury or exposure to contagious disease which incapacitates the employee from performing normal work duties.

This includes disabilities caused or contributed by pregnancy, miscarriage, abortion, childbirth and recovery therefrom.

(c) Family Sick Leave . Employees may utilize up to one -half (1/2) of their annual sick leave accrual in the case of illness or injury in the employee's immediate family when such illness or injury requires personal care that otherwise would not be covered by the Family Medical Leave Act ( FMLA) or the California Family Rights Act (CFRA) leaves.

Such leave shall be restricted to the employee's parents, spouse, mother -in-law, father-in-law, child, stepchild, brother, sister, brother -in-law, sister -in-law, EXHIBIT 1

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grandparent and grandchild, legal depende nt, registered domestic partner , and “designated person .” For purposes of paid sick leave, a “designated person” means a “person identified by the employee at the time the employee requests paid sick leave.” An employee may select one (1) person as a “designated person” in a twelve (12) month period.

In special cases, with the approval of the Director of Human Resources, a department head may grant the use of sick leave in other circumstances.

It is not the intent of this provision to conflict with any state or federally mandated policies, such as FMLA, CFRA, or Pregnancy Disability Leave (PDL).

(d) Reporting Procedures for Sick Leave. When the requirement for sick leave is known to the employee in advance of the absence (for example, including but not limited to scheduled medical, dental or vision appointments), the employee shall request authorization for such sick leave from the dep artment head prior to such absence.

If an employee is not able to report due to illness or injury, the employee shall report as soon as possible to the appropriate supervisor, but in no case more than thirty (30) minutes after the start of the work day, except for extenuating circumstances prohibiting giving notice. Each Supervisor will have the authority to identify acceptable forms of sick leave notification and will provide acceptable forms of sick leave notification in writing to employees; however, at all times the employee must contact their direct supervisor directly when not able to report to work. If the employee’s direct supervisor is unavailable, the employee must contact the next-level supervisor.

Failure to notify as soon as possible and in conforming to the thirty (30) minute notification shall be cause for the following disciplinary action:

(1) For the first time within a six (6) month period, a Memorandum of Discussion.

(2) For the second time within a six (6) month period, a Letter of Reprimand.

(3) For any subsequent time within a six (6) month period, suspension from work; or at any time four (4) or more
incidents occur within a six (6) month period, the employee may be discharged.

The six (6) month period will be defined as six (6) months from the most recent incident. If no other incident occurs within six (6) months of the most recent incident, the disciplinary data will be removed from the employee’s active file.

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(e) Verification Procedures

(1) Before being paid for the use of accrued sick leave, the employee shall submit a request for sick leave form, stating the dates and hours of absence, and the type of sick leave being requested such as sick leave for self, family member and/or FMLA.

(2) Doctor's Certificate or Other Proof . The Director of Human Resources may require a doctor’s certificate or other reasonable proof of illness as they deem necessary in order for an employee to receive an excused absence from work and sick leave pay. The employee shall be given notice prior to returning to work that they will be required to provide such documentation. Employees who have unscheduled absences due to illness on a scheduled work day preceding or following a holiday may be required to bring a doctor’s certificate or other reasonable proof of illness in order to receive an excused absence and sick leave pay. If an employee’s illness results in an absence from work for more than three (3) consecutive days, a doctor’s certificate or other reasonable proof of illness may be required. In addition, the City may monitor and control the appropriate use of sick leave by employees and if reasonable cause is articulated, can limit use of sick leave and require additional verification.

(3) If the City has a reasonable basis to believe that an employee is abusing the sick leave benefit, the City or the employee's supervisor must first meet with the employee to: 1) explain the reasonable basis for the believed abuse, and 2) discuss the reasons for the employee's absence.

The employee has the right to Union representation at such meeting. After such meeting, and depending on the factual circumstances, the City may:

(a) Place the employee on restricted sick leave for a period of not more than four (4) months, under the direction of the Director of Human Resources pursuant to section (e)(2) above;

(b) Suspend the employee without pay for up to five (5) days for abuse of sick leave; or dismissal from employment if a prior suspension involved abuse of sick leave;

(f) Use of Sick Leave While on Vacation. An employee who is injured or who becomes ill while on vacation may be paid for sick leave in lieu of vacation provided that the employee:

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(1) Was hospitalized during the period for which sick leave is claimed, or

(2) Received medical treatment or diagnosis and presents a statement indicating disabling illness or injury signed by a physician covering the period for which sick leave is claimed.

(g) Payment for Unused Sick Leave for Unit Employees. Effective February 17, 2012, all accumulated or future accruals of sick leave shall have no cash value upon separation of employment and employees shall not be allowed to cash out unused sick leave except as provided below.

(h) CalPERS Service Credit for Unused Sick Leave. Employees shall be eligible for CalPERS service credit for any unused sick leave at retirement not otherwise compensated for in (i) below. Employees hired on or after December 29, 2012 shall not be eligible for this service credit.

(i) Sick Leave Retention Benefit. If, after subtracting the equivalent of one (1) full year of service credit (2080 hours), which may be applied to CALPERS service credit, any balance remaining upon separation shall be paid as follows to employees who have remained in City service until the dates specified:

(1) Separation prior to July 1, 2014, no payment of unused sick leave at separation shall occur for separating employees before this date;

(2) Separation between July 1, 2014 and June 30, 2015, payment of unused sick leave which the employee held on February 16, 2012, shall be paid at thirty five percent (35%) of its cash value to separating employees between these dates; and

(3) Separation after July 1, 2015, payment of unused sick leave which the employee held on February 16, 2012 shall be paid at fifty percent (50%) of its cash value to separating employees after this date.

(4) Service credit for unused sick leave shall be in accordance with PERS regulations.

8.3 Other Leaves with Pay

(a) Bereavement Leave . In the event of a death of an immediate family member, the employee will be granted up to five (5) days bereavement leave. The City provides paid bereavement leave for the first three (3) days. The employee may use any other paid leave for the remaining two (2) days of bereavement leave.Immediate family is restricted to the employee’s parents, spouse, parent-in- EXHIBIT 1

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law, child, sibling, brother -in-law, sister -in-law, grandparent, grandchild, and registered domestic partner.

In the event of the death of a person that is not an immediate family member, the employee's department head may grant up to three (3) days of unpaid bereavement leave.The employee must use accumulated sick leave or annual leave. If the deceased is the person who is the employee’s current “designated person” for purposes of family sick leave pursuant to Section 8.2(c), the request to use sick leave or annual leave shall not be unreasonably denied.

(b) Jury Duty Leave

When an employee is summoned to jury duty, they will promptly inform their supervisor and, if required to serve, may be absent from work without loss of wages or use of accrued leave while rendering such service (including travel time). Upon being excused from the court each day, the employee must return to work if they have more than four (4) hours remaining before the end of their workday.

8.4 Workers' Compensation Leave

(a) Workers' Compensation Benefits shall be provided in accordance with State law and schedules whenever an employee is absent from duty because of disability caused by illness or injury arising out of and in the course of employment which has been declared to be compensable under the Work ers' Compensation Law. An employee on Workers’ Compensation may use accrued leave, if needed, to supplement benefits, up to the amount required to receive a full paycheck.

(b) Forms and Procedures . Workers’ compensation processing shall be consistent with City procedures and in accordance with state workers’ compensation regulations. An employee who sustains a work -related injury or illness shall immediately inform their supervisor no matter how minor an on -the- job injury may appear. An employee who sustains a work -related injury or illness is required to seek medical care at facilities designated by the City unless they have filed a pre -designation of personal physician prior to sustaining the work - related injury or illness. For a list of City designated medical care facilities and/or physicians, please contact the Human Resources department.

8.5 Leave of Absence Without Pay

(a) Entitlement. Employees shall not be entitled to a leave of absence without pay as a matter of right, but only upon the determination of the City that the granting of such leave is in the best interest of public service and that there is a presumption the employee intends to return to work upon the expiration of the leave of absence.

Leaves of absence are subject to eligibility in accordance with state and federal guidelines. The granting of a leave of absence provides the employee the right to EXHIBIT 1

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return to the position vacated.

(b) Approval. All leaves of absence without pay must be recommended by the department head and approved by the Director of Human Resources. No such leave may extend beyond twelve (12) months, except in the case of absence due to job incurred disability where a determination may be made based upon the needs of public service, or in the event an application for service connected disability retirement has been filed.

(c) All leaves without pay must be recommended by the department head and approved by the Director of Human Resources. Leaves of absence approved in accordance with state and federal guidelines may be taken without pay for illness following the exhaustion of entitlement of sick, vacation, and other accrued leave hours.

8.6 Absence Without Official Leave (AWOL)

(a) Refusal of Leave or Failure to Return after Leave. Failure to report for duty or failure to report for duty after a leave of absence request has been disapproved, revoked, or canceled, or at the expiration of a leave, shall be considered an absence without official leave.

(b) Voluntary Resignation. Any employee in this bargaining unit absent without official leave for two (2) or more consecutive scheduled days without a satisfactory explanation as approved by the Director of Human Resources shall be deemed to have voluntarily resigned from the City of Stockton. An employee must provide a written statement to the Human Resources Department regarding a "satisfactory explanation", within ten (10) calendar days after the City mails a notice of voluntary resignation to the employee's last known address.

Section 9. Days and Hours of Work

9.1 Workweek

The normal work week for employees is defined as either the traditional work week consisting of eight (8) hours per day , five (5) days per week ; the alternate 9/80 work schedule consisting of 9 hour work days Monday through Thursday, 8 hour workday on Friday with every other Friday off; or the twelve (12) hour workday shift schedule. Employees assigned to the eight ( 8) hour and twelve ( 12) hour schedules have a defined work week that starts at 12:00 a.m. Sunday through 11:59 p.m. Saturday; the 9/80 schedule work week starts mid-shift Friday through the following mid -shift Friday. Where operational requirements of a department require deviations from these schedules, the department head with City Manager approval may institute alternate work schedules as long as the City meets with the Union over the impact of such schedules and conforms to work period EXHIBIT 1

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requirements of the FLSA. Twelve (12) hour workday employees are not set up in the City’s payroll system as “salaried” and therefore are paid for actual hours worked each pay period (i.e. no salary adjustment); however when the City implements its new payroll system, all employees may be paid for actual hours worked each pay period only (i.e. no more salary adjustment).

9.2 Meal Periods and Rest Periods

(a) Employees shall receive a one (1) hour or one half-hour (1/2) meal period, without pay, each day and a fifteen (15) minute paid rest period during the first half of the work day and a second fifteen (15) minute paid rest period during the second half of the work day. Employees who exceed the time limits prescribed above for lunch and/or rest periods shall have their pay reduced accordingly.

(b) Where operational requirements of a department require deviations from this schedule, meal periods of other du rations and alternate rest periods may be instituted with the approval of the Department Head or Designee.

9.3 Reporting to Work

Repeated failure to report to work on time may result in appropriate discipline as set forth below:

(a) For the first time in a six (6) month period, a Memorandum of Discussion.

(b) For the second time within a six (6) month period, a Letter of Reprimand.

(c) For any subsequent time within a six (6) month period, suspension from work; or at any time four (4) or more incidents occur within a six (6) month period, the employee may be discharged.

If an employee reports to the work site after the designated starting time, the employee will be paid only for time actually worked ; however, the employee may be allowed to utilize annual leave for lost pay, provided the employee's supervisor approves.

Any Memorandum of Discussion or Letter of Reprimand regarding tardiness which is more than six (6) months old will be removed from the personnel file upon request.

Section 10. Overtime

10.1 Overtime Authorization

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designated representative in advance of being worked. If prior authorization is not feasible because of emergency conditions, a confirming authorization must be made on the next regular working day following the date on which the overtime was worked.

10.2 Definition

The following provisions pertaining to authorized or statutorily required overtime work shall apply to non- FLSA exempt employees.

(a) Statutory overtime shall be paid on time worked in excess of forty (40) hours in any seven (7) day FLSA workweek. Such overtime shall be paid at one and one-half (1 1/2) times the employee’s regular rate of pay. Observed holidays, floating holidays, jury duty leave, bereavement leave, vacation, and sick leave are considered as time worked for overtime calculation purposes.

(b) The City may require mandatory overtime when operational needs exist and if the City dictate s the need to work such overtime. Work in excess of forty (40) hours worked as defined in (a) above in any workweek that qualifies for overtime will be paid or taken as Compensatory Time-off (CTO) in accordance with section

10.5(b).

(c) Temporary Upgrade Pay. Employees assigned to work overtime in a position or classification other than the position or classification to which they are permanently appointed to, will be paid overtime at the hourly rate attached to the position or classification in which they are performing such overtime work.

10.3 Standby Pay

When warranted and in the interest of City operation, department heads or their designee may assign employees to "standby" status.

(a) Application of "standby" shall be as follows:

(1) Each employee assigned to "standby" shall be provided with a communication device while on standby and shall be able to report to the work site with best efforts within thirty (30) minutes; in no event longer than forty-five (45) minutes . Employees on Standby shall ensure that they are available and able to return to work to perform their assigned duties.

(2) Employees on standby shall have the option to trade hours of standby status with another qualified employee in the same unit or division with departmental approval.

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(3) Standby shall be assigned in a minimum of eight (8) hour blocks., i.e., Monday - Friday work week standby can be eight (8), sixteen (16), twenty-four (24) hour blocks. The block of standby will be to one (1) person per a twenty-four (24) hour period.

Standby for weekends i.e., Saturday, Sunday or extended holiday weekends (Friday – Sunday, or Saturday – Monday) will be assigned 8 - 48 hour blocks to one (1) person per weekend (up to seventy-two (72) hours for holiday weekend).

(b) Compensation of "standby" shall be as follows:

(1) Employees assigned to standby duty shall be paid four dollars ($4.00) per hour while assigned to be on standby. An employee shall not continue to receive the “standby” premium during actual time worked, or for any hours paid as overtime or call back. Standby is not considered as time worked for purposes of calculating overtime.

10.4 Call Back

Employees who are called back to physically return to work from off duty status, shall be compensated for a minimum of two (2) hours and forty -five (45) minutes of pay.

When authorized by the department, employees who are contacted and who provide remote support via telephone, Internet, or network connection will be paid for time worked in fifteen (15) minute intervals . Intervals cannot be compounded or overlapped.

To be eligible for call-back pay, both of the following conditions must be met:

(a) The call -back must occur outside of the employee’s regular work hours.

(b) The call-back time worked must not be contiguous to the employee’s regular work hours.

10.5 Compensatory Time (CTO)

(a) Definition. As used in this section, the term Compensatory Time Off (CTO) refers to that time which an employee is enti tled to be absent from duty with pay for hours worked in addition to or excess of their normal work schedule.

(b) Accrual. For hours worked in excess of forty (40) hours in a seven (7) day EXHIBIT 1

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work period as defined in section 10.2(a), CTO may be earned at the rate of time and one-half (1-1/2). No more than one hundred (100) hours may be carried on the books at any time.

(c) Use. Use of CTO shall be scheduled with due consideration for the wishes of the employee and so as to not interfere with the normal operation of City business. Approval of requests for use of CTO shall be at the sole discretion of the department head, but once approved, cannot be changed unless an emergency situation arises.

(d) Payment. Once one hundred (100) hours of CTO is accrued on the books, all other hours worked in excess of forty (40) hours in a seven (7) day work period will automatically be paid at the employee’s regular rate of pay.

At the end of each calendar year, all CTO will be carri ed forward (40 hours maximum), unless the employee elects to have the compensatory balance paid.

Carryover CTO cannot exceed the forty (40) hours maximum.

Any CTO balance in excess of forty (40) hours remaining at the end of the calendar year will automatically be paid unless the employee submits the Compensatory Time Deferral form to Payroll by November 1st. In order for the employee to be eligible for this option, they must have at least one (1) preapproved scheduled day off in December. If the employee is unable to t ake days off as planned in December, the payout will occur in January.

10.6 Meal Allowance

The City shall provide a meal allowance of fifteen dollars and no cents ($15.00) for an employee who is held over and works a minimum of four (4) hours.

Employees called back to work or called back from a day off with less than two (2) hours’ notice shall qualify for the fifteen dollars and no cents ($15.00) meal allowance when they work a minimum of four (4) hours. Extension of the work schedule or call -back must be properly authorized by the employee's supervisor or other designated personnel.

10.7 Fatigued Employees Rest Period

(a) The following provision ensures that an employee is not required to work such a significant number of hours that it might lead to extreme fatigue of that employee or place that employee in violation of any state or federal law governing employees possessing a Commercial Driver’s License. Further, the City seeks to provide and maintain a safe working environment. (b) Eligibility. An employee who is required to work four (4) hours or more overtime within a sixteen (16) -hour time period and whose regularly EXHIBIT 1

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scheduled work shift begins fewer than six (6) hours from the time the overtime work ends, will be afforded a full eight (8) -hour rest period before returning to work.

This provision applies only to employees assigned to a 9/80 work schedule and does not apply to employees on Standby assignment. However, it shall apply to employees that are called back from standby.
(c) Rest Period. If the eight (8)-hour rest period extends into the next regularly scheduled work shift, the employee will be absent from the workplace for a period of time totaling eight (8) hours. Any portion of the eight (8)-hour rest period that extends into the regularly scheduled work shift will be considered hours worked for the purposes of overtime.
(d) Examples.
(1) Continuous. The employee’s regular shift ends at 11:00 p.m. and they are required to work five (5) hours of overtime and get off at 4:00 a.m. The employee's next scheduled shift begins at 6:00 a.m. The employee is entitled to eight (8) hours of rest beginning at 4:00 a.m.

Since the eight (8) hours extends into the regular shift, the employee is entitled to six (6) hours of paid fatigue time from 6:00 a.m. to 12:00 p.m.
(2) Intermittent. The employees’ regular shift ends at 3:30 p.m. and they are required to intermittently work five hours of overtime from 7:00 p.m. to 10:00 p.m. then again from 2:00 a.m. to 4:00 a.m. The employee is entitled to eight (8) hours of rest beginning at 4:00 a.m.

Since the eight (8) hours extends into the regular 6:00 a.m. shift start time, the employee is entitled to six (6) hours of paid fatigue time from 6:00 a.m. to 12:00 p.m.
(e) Additional Rest Period. If, following the eight (8) -hour rest period, the employee is still too fatigued to return to work, the employee may request additional time off to be charged to the employee’s vacation accruals, CTO balance, or sick leave if applicable. This additional time off will be considered and recorded as an approved absence under the City’s attendance policy.
(f) In the case of an emergency, a Department Director or designee may authorize an employee to work longer without a rest period.

Section 11. Holidays

11.1 Qualifying for Holiday Pay

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All regular status employees, excluding provisional, temporary, and part -time employees, shall be entitled to the holiday benefit at full pay not to exceed the employee’s regular work day for any one (1) holiday. For an employee working on a 4/10, 9/80 or 12 - hour work day plan, holidays shall be paid equivalent to the employee’s regularly scheduled work hours (e.g. 9 hours for 9- hour day or 8 hours on an 8- hour day on 9/80 schedule, or 12 hours of holiday pay for 12-hour shift).

11.2 Holidays Observed by the City

The City observes the following holidays on the dates indicated:

(1) January 1………. ................................................................... . New Years' Day (2) Third Monday in January (FLOATING) ..........Martin Luther King Jr.'s Birthday (3) Second Monday in February (FLOATING) .......................... Lincoln's Birthday (4) Third Monday in February (FLOATING) ....................... Washington's Birthday (5) Last Monday in May ................................................................... Memorial Day (6) July 4 .................................................................................. Independence Day (7) First Monday in September .............................................................. Labor Day (8) Second Monday in October (FLOATING).................. Indigenous Peoples Day (9) November 11 ............................................................................. Veteran's Day (10) Fourth Thursday in November .................................................... Thanksgiving (11) The day following the day known as Thanksgiving
(12) December 25 ............................................................................ Christmas Day

For positions that observe holidays, employees accrue floatin g holiday ho urs equivalent of two (2) workdays annually on the first full pay period to a maximum of two (2) workdays. Floating holidays must be utilized in full day increments. Upon separation, unused floating holiday hours will be paid out at the employee’s current straight time rate of pay.

For employees on a Monday through Friday workweek, if a fixed holiday falls on a Sunday, the following Monday will be observed. If holidays fall on a Saturday, the preceding Friday will be observed. For employees who work in a division staffed for twenty -four (24) hour operations, fixed holidays that fall on a Saturday or Sunday will be observed on Saturday or Sunday respectively.

To receive Holiday Pay, the employee must be in a paid status the day before and the day after the holiday.

An employee who takes a holiday off on a normally scheduled work day will receive a regular work day worth of holiday pay at their regular rate of pay, and the holiday hours count as time worked for FLSA overtime calculation purposes. A holiday that falls on an employee’s normally scheduled day off will receive a regular work day worth of holiday pay at their regular rate of pay, however the holiday hours will not be counted as time worked. If an employee works on a holiday, the employee will EXHIBIT 1

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receive a regular work day worth of holiday pay at their regular rate of pay, actual hours worked will be paid at the time and one half (1-1/2)and holiday hours will not be counted as time worked. If an employee works only partial hours on a holiday, partial holiday hours will be counted as time worked for FLSA overtime calculation purposes (up to the employee’s normal work day).

11.3 Compensation for Holidays Worked

Prior approval for holiday work must be secured from the City Manager except in emergency situations where said approval cannot be obtained beforehand.

Section 12. Compensation and Allowance Other Than Base Salary

12.1 Public Employee Retirement System Benefits for Unit Employees hired on or before December 28, 2012.

(a) The City will pay seven percent (7%) of the employee's current base salary (employee's contribution) and other compensation as qualified by State law towards the Public Employees’ Retirement System (P.E.R.S.). Such amounts will be applied to the employee's individual account in accordance with California Government Code section 20691 unless modified below.

(b) The City's P.E.R.S. retirement plan is two percent (2%) at age fifty-five (55).

(c) The City's P.E.R.S. retirement plan is modified to reflect California Government Code section 21024 (Military Service Credit as Public Service) and section 21027 (Military Service Credit for Retired Persons) effective upon adoption by Stockton City Council and Board Administration of the P.E.R.S.

(d) The City will provide P.E.R.S. California Government Code section 20692 (Employer Paid Member Contributions Converted to Payrate during the Final Compensation Period) as added P.E.R.S. benefits. At the beginning of the employee’s last year of employment, the employee will pay their employee’s seven percent (7%) benefit cost through an automatic payroll deduction. The City will increase the base salary for those employees by the same seven percent (7%) for the last twelve (12) months of employment. Internal Revenue Service (IRS) Code 414H(2) wil l be concurrently implemented with P.E.R.S. California Government Code section 20692, to be effective upon adoption by the Stockton City Council and P.E.R.S. Administration Board.

The City will provide P.E.R.S. California Government Code section 20965 (Credit for Unused Sick Leave) as added P.E.R.S. benefits, to be effective upon adoption by the Stockton City Council and P.E.R.S. Administration Board.

The City will provide P.E.R.S. California Government Code section 21574 (Fourth EXHIBIT 1

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Level of 1959 Survivor Benefits) as added P.E.R.S. benefits, to be effective upon adoption by the Stockton City Council and P.E.R.S. Administration Board.

The City will provide PERS California Government Code section 21335 up to a five percent (5%) Annual Cost-of-Living Allowance, as added PERS benefit.

(e) Effective August 1, 2011, in consideration of (a) above, employees hired on or before December 28, 2012 shall pay seven percent (7%) of the employee’s current base salary and (employee contribution) and other compensation as qualified by state law towards the Public Employees’ Retirement System (P.E.R.S.) towards employer’s share of cost for P.E.R.S. pension on a post -tax basis in the form of a payroll deduction. The City will seek an IRS private letter ruling to determine whether or not the IRS permits the employee’s contribution to the employer’s share of pension cost to be treated on a pre -tax basis. If the IRS issues a private letter ruling allowing employee’s contribution towards employer pension cost on a pre -tax basis, the City wil l change the deduction from post -tax to pre-tax as soon as administratively possible after the IRS final determination.

12.2 Public Employee Retirement System Benefits for Unit Employees hired on or after December 29, 2012.

(a) The City amended its contract with P.E.R.S. effective December 28, 2012 to provide a new second tier retirement program of two percent (2%) at sixty ( 60) with three (3) year average salary formula and no other additional P.E.R.S. benefits for all unit employees hired on or after December 29, 2012.

(b) Employees hired on or after December 29, 2012 shall pay the entire seven percent (7%) of the employee’s current base salary (as the employee contribution) and any other compensation as qualified by state law towards P.E.R.S. retirement benefit through a payroll deduction.

12.3 PERS Benefits for Employees hired on or after December 29, 2012 (a) Employees with Reciprocity:

Employees hired on or after December 29, 2012, who had service under another CalPERS agency or public retirement system with reciprocity prior to January 1, 2013, and a break in service of less than six (6) months and are considered classic employees by PERS AB340, shall be subject to the PERS pension formula of two percent (2%) at sixty (60) with no optional pension enhancements and the other provisions of the retirement tier they were hired under. Employee’s shall pay the entire seven percent (7%) of the employee’s current base salary (as the employee contribution) and any other compensation as qualified by state law towards P.E.R.S. retirement benefit through a payroll deduction.

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(b) Employees without Reciprocity:

Employees hired on or after January 1, 2013, shall be subject to the PERS AB340 pension formula of two percent ( 2%) at sixty-two (62) with no optional pension enhancements and the other provisions of the retirement tier they were hired under. Employees shall pay fifty percent (50%) of the City’s normal cost rate for the two percent (2%) at sixty-two (62) as determined by CalPERS.

12.4 Uniforms

(a) The City shall provide uniforms for all employees assigned to this unit who are required to wear uniforms during the course of work.

(b) Safety Protective Footwear Reimbursement A llowance. Employees required to wear safety protective footwear in accordance with the City Manager’s Administrative Directive HR-34, and approved for safety protective footwear reimbursement, the City will authorize safety protective footwear reimbursement in the amount of three hundred dollars ($300.00) as needed and approved by the employee’s supervisor and department head . Employees shall be allowed to use any unused funds towards the purchase of (1) insoles and socks and/or (2) an additional pair of safety protective footwear. Unless approved otherwise, employees are limited to a total of $300.00 per fiscal year for safety protective footwear.

12.5 Preventive Shots

Employees in the Municipal Utilities Department (MUD) whose work assignments involve potential exposure to hazardous waste water shall, at the employee's option, be provided all necessary medical immunization available for the prevention of job incurred illness.

12.6 Special Driver's License Pay

Job classifications requiring a Class A and/or Class B Driver's License or Hazmat endorsement will receive special pay equal to one and one -half percent (1-1/2%) of top step of job classification.

Special Driver's License Pay will only be implemented with the concurrent implementation of the Operating Engineers' Local No. 3 - City of Stockton, Drug/Alcohol Safety Program.

12.7 Longevity Pay

Effective August 1, 2011, longevity pay shall be eliminated. However, the City EXHIBIT 1

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shall grandfather only those employees who complete twelve (12) continuous years of service with the City as of July 1, 2012, with two and one -half percent (2.5%) of top salary step of the employee’s pay range to the employee as a longevity incentive pay allowance. As of July 1, 2012, longevity incentive pay allowance for these grandfathered employees shall be reduced to one and one - half percent (1.5%).

12.8 Credit Union

The City will accommodate payroll deduction s to Operating Engineers' Local No. 3 Credit Union, within the limitations of City payroll system. Any modification costs will be borne by Operating Engineers' Local No. 3.

12.9 Education, Training and Development.

The City will provide internal and external training programs on a wide variety of subjects. Employee participation will be based on subject matter relevance to job requirements, budgetary constraints and workload demands . Any Training programs that emplo yees are directed or authorized to participate by their department will be fully paid for by the department. Costs paid by the City include tuition, registration fees, related materials, and mileage/meal reimbursement if the training is not located on City premises.

12.10 Certification, Certification Training and Special Certifications

(a) Certification dues or fees required of employees in their specialized fields of work will be reimbursed by the City at the actual costs. Pre-approved training(s) to maintain a job-related certification will be paid at one hundred percent (100%) by the City. The City will pay for two (2) attempts at passing the test. The City will reimburse employees for the costs of obtaining and maintaining certifications that are required pursuant to their job specification/job description. Reimbursement for the cost of obtaining and maintaining memberships and certifications that are identified as “desired” in a job description/specification, or are not identified at all, is at the discretion of the department head.

(b) The City will offer a one-time add pay off the salary line for employees who receive State certification for Water, Wastewater, Water Distribution, or CWEA. All employees are eligible to obtain certification in Water and Wastewater.

Water,
Wastewater
Water Distribution CWEA One Time
Add Pay
5 4 and 5 4 $1,000.00
4 3 3 $750.00
3 2 2 $200.00
2 1 1 $150.00
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Water,
Wastewater
Water Distribution CWEA One Time
Add Pay
1 $100.00

A maximum of two (2) certification levels will be paid by the City in a calendar year to any one (1) employee. Certifications (at State specific levels) will be required for some positions. Loss of certifications shall result in the employee being demoted to the level according to their certification level. The employee will be moved back to their former level if they obtained the necessary certification within twelve (12) months. Any employee who loses or is denied a certification shall notify their supervisor within seven (7) calendar days, and shall submit a copy of any notice received from the state or any other agency.

(c) Add on pays will be issued to employees with the following special certifications up to a maximum of eight (8) Crane Operators:

Crane $1.75
Backflow $1.00

(d) An employee assigned to the wastewater , water treatment, water production and water distribution function in the operator series who receives and maintains a level 4 or 5 Wastew ater, water treatment, water production and water distribution Operator Certification will receive the following quarterly amounts added to their monthly paychecks for each grade level certification above a grade 3 certification that exceeds the certification level required for the position held. Any employee receiving such certification pay will perform duties authorized by such certification level as required when necessary due to operational needs.

One level above
required certification
level
$1,000.00
Two levels above
required certification
level
$2,000.00

As of June 30, 2014, any current employee who is receiving this certification pay who does not meet the requirement of being within the operator series of classifications shall be grandfathered in to continue receiving such add pay as long as other require ments are met as described above. Effective July 1, 2014 , no additional employees shall receive this certification pay unless all requirements above are met. In addition, any current employees who are receiving this certification pay based upon a certification level which is required for the position held shall have this certification pay reduced accordingly.

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Equipment Operator and possess a Grade D1 Distribution Operator Certificate issued by the California Department of Health Services shall receive an additional three percent (3%) of base pay.

Section 13. Insurance Plans and Retirement Benefits

13.0 Reopener Clause for Health Insurance

(a) The Union agrees at the City’s request, to meet and confer on any changes that are within the mandatory scope of bargaining in any City proposals related to its City sponsored medical plans that may be related to the implementation of the Affordable Care Act (ACA).

(b) The City agrees at the request of the O&M Unit to meet and confer regarding employer benefits and premium contributions should medical/dental/vision insurance premiums for employee -only, employee plus one (1) dependent or employee plus family increase by more than four percent (4%) in any one (1) plan year.

13.1 Health and Welfare Benefits

(a) Choice of Health Plans . Employees in this bargaining unit shall have a choice of enrolling themselves and their eligible dependents in any of the City sponsored medical, dental and vision plans or Operating Engineer Health and Welfare Trust Fund Plan ( Anthem Plans A, B, C, and D, and Kaiser Plans A , B, and A+ ). The City shall offer two (2) or more medical plans to regular status employees.

(b) Eligibility. Employees shall become eligible for Medical , Dental and Vision insurance on the first day of the month following date of hire. An eligible employee and eligible dependent may be enrolled in a City offered medical plan either as a subscriber in a City offered medical plan or, as the dependent spouse/registered domestic partner or another eligible City employee, but not both. If an employee is also eligible to cover their dependent child, the child will be allowed to enroll as a dependent on only one (1) employee plan (i.e., an employee and his or her dependent cannot be covered by more than one City-offered health plan).

1) The City shall contribute the following:
• Up to $936.10 per month toward the cost of the monthly premium for employee-only medical/dental/vision plan coverage.
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for employee plus one (1) dependent medical/dental/vision plan coverage.
• Up to $2,263.20 per month toward the cost of the monthly premium for employee plus two (2) or more dependents medical/dental/vision plan coverage.

2) Effective January 1, 2027, the City contributes the following:
• Up to $973.54 per month toward the cost of the monthly premium for employee-only medical/dental/vision plan coverage.
• Up to $1,766.49 per month toward the cost of the monthly premium for employee plus one (1) dependent medical/dental/vision plan coverage.
• Up to $2,353.73 per month toward the cost of the monthly premium for employee plus two (2) or more dependents medical/dental/vision plan coverage.

3) Effective January 1, 2028, the City contributes the following:
• Up to $993.01 per month toward the cost of the monthly premium for employee-only medical/dental/vision plan coverage.
• Up to $1,801.82 per month toward the cost of the monthly premium for employee plus one (1) dependent medical/dental/vision plan coverage.
• Up to $2,400.80 per month toward the cost of the monthly premium for employee plus two (2) or more dependents medical/dental/vision plan coverage.

4) Effective January 1, 2029, the City contributes the following:
• Up to $1,012.88 per month toward the cost of the monthly premium for employee-only medical/dental/vision plan coverage.
• Up to $1,837.86 per month toward the cost of the monthly premium for employee plus one (1) dependent medical/dental/vision plan coverage.

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• Up to $2,448.82 per month toward the cost of the monthly premium for employee plus two (2) or more dependents medical/dental/vision plan coverage.

These contributions are based on full -time employment; regular part -time employees shall receive a prorated contribution based on their percentage of full-time employment. Insurance plan premiums that exceed the City’s monthly contribution shall be paid by the employee through payroll deductions. The City shall maintain its IRS 125 Plan to allow for employee contributions for medical/visions/dental to be pre-tax premium conversion.

(d) Plan Rules . Employees may insure themselves and their eligible dependents under the medical , vision and dental plans provided by the City, in accordance with the rules and regulations applicable to the selected Plan. Benefits in the Plan shall be in accordance with the Plan document.

(e) Employees that promote, demote, or transfer from a classification in the O&M unit to an unrepresented classification shall continue to have the option to retain the Operating Engineers' Local No. 3 Health and Welfare Plan.

(f) Payment of costs for City administrative overhead for Operating Engineers sponsored Plans.

The City costs to administer the health plans offered to employees and retirees are incorporated into the monthly rates for City Sponsored medical, dental and vision insurance paid by the City and the plan participants. Effective July 1, 2014, the City will add to the monthly plan costs for the Operating Engineer Plans offered to employees those City administrative overhead costs associated with these plans in addition to the City sponsored plans. Only costs associated with the OE3 plans will be charged to those plans and will be updated each plan year.

13.2 Long Term Disability Insurance

The City shall provide, at no cost to the employee, long term disability insurance coverage. Plan benefits shall be as described in the Plan document, but shall include:

(a) Each disability – sixty-six and two thirds percent (66 2/3%) of salary up to the maximum salary replacement amount as specified in the City’s long term disability plan.

(b) Disability income payments shall commence after a ninety (90) day waiting period and exhaustion of sick leave accruals.

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(d) The City shall continue its normal contribution for employee medical premiums during the ninety (90) day waiting period.

13.3 State Disability Insurance (SDI)
At the Union’s option, pursuant to procedures established by the state, members may elect to receive State Disability Insurance (SDI) coverage at their own expense. SDI will be coordinated with other benefits.

13.4 Life Insurance

The City provide seach employee group term life insurance policy and a n accidental death and dismemberment insurance policy in the amount of of fifty thousand dollars ($50,000). In addition, employees can purchase additional voluntary life insurance through their union or through the City’s IRS 125 vendor.

13.5 Long-Term Care

Employees can purchase optional long term care coverage from PERS to cover home care and nursing home care. The premiums rates are established by PERS based on the age of the participant.

13.6 Health Reimbursement Account (HRA)

The City will contribute an amount equal to five and one half percent (5.5%) of the employee’s current base salary that was previously contributed to deferred compensation and redirect that same contribution into an IRS qualified HRA for each employee to use for reimbursement of current and retiree medical cost reimbursements.

Section 14. Salaries

14.1 Salary Rates

(a) Effective September 20, 2026 , or the pay period following City Council approval, whichever is later, employees will receive a two percent (2%) Cost of Living Adjustment (COLA) to base pay (Attached is the revised salary schedule including the 2% COLA plus market adjustment).
(b) Effective the first full pay period starting June 27, 2027, employees will receive a two percent (2%) COLA to base pay.

(c) Effective the first full pay period starting June 25, 2028, employees will receive a two percent (2%) COLA to base pay.

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(d) The 2022 Total Compensation survey prepared by Bryce Consulting made specific recommendations for internal relationships between classifications in the O&M Unit and employees in the same job family. In the event these internal relationships change, the parties will consider ho w to address compaction between those classifications.

14.2 Additional Steps
The salary ranges for all classifications is set forth in the City’s Salary Schedule.

Effective September 20, 2026, or the pay period following City Council approval, whichever is later, the City shall add additional steps, consistent with the attached salary schedule, at two and a half percent (2.5%) each step. Consistent with the City practice, progression in the additional steps will require one year of paid status within the step prior, (i.e. progression to Step 7 requires 1 year of service in Step 6 and progression to Step 8 requires 1 year of service in Step 7).

14.3 Salary upon Appointment

Except as herein otherwise provided, the entrance salary for a new employee entering the classified service shall be the minimum salary for the class to which appointed. When circumstances warrant, the Director of Human Resources may approve an entrance salary which is more than the minimum salary for the class to which an employee is appointed. Such a salary may not be more than the maximum salary for the class to which that employee is appointed.

14.4 Salary Step Plan

(a) There shall be up to nine (9) salary steps in each range.

(b) The first step shall be the minimum rate and is the normal hiring rate for the class. (In a case where a person possesses unusual qualifications, the Director of Human Resources may authorize appointment above the first step after receiving the recommendation of the department head.)

(c) Step 2 is obtained after satisfactory completion of six (6) months at the first step, Steps 3 through 9 are obtained after satisfactory completion of one (1) year in the previous step.

(d) If a department head recommends withholding increases to salary steps two (2) through seven (7) because an employee has not achieved the level of performance required, notice must be received by the City Manager at least four (4) weeks in advance of the employee's eligibility date. The affected employee shall be furnished a copy of the department head's recommendation. Fai lure to EXHIBIT 1

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abide by the above four -week limitation shall not automatically cause a step increase to be granted; however, if an employee does not receive notice by the actual anniversary date, the increase shall be automatically granted.

(e) Salary step increases will be effective the first day of the pay period following appointment or revision. If the date of appointment or revision is the first day of a pay period, salary step increases shall be as of that date.

(f) Changes in an employee's salary because of promotion, demotion, postponement of salary step increase or special merit increase will set a new salary anniversary date for that employee, which date shall be as stated in the preceding paragraph.

(g) Salary range adjustments for a classification will not set a new salary anniversary date for employees serving in that classification.

(h) Salary Step Entry -Level Classifications. The City Manager may create a ten percent (10%) salary step reduction to any entry -level classification represented by this bargaining unit. The next and all subsequent salary steps shall be paid upon the satisfactory completion of one (1) year service at current salary step.

14.5 Salary Step After Promotion or Demotion

(a) When an employee is promoted from a position in one class to a position in a higher class, and at the time of promotion is receiving a salary equal to, or greater than, the minimum rate for the higher class, that employee shall be entitled to the next step in the salary scale of the higher class which is at least five percent (5%) above the employee's current base salary, except that the next step shall not exceed the maximum salary of the higher class. Add pays are not included in the calculation of base salary for purposes of this section. When an employee is promoted into another bargaining unit, the new bargaining unit’s salary on promotion rules shall apply.

(b) When an employee is demoted, whether such demotion is voluntary or otherwise, that employee's compensation shall be adjusted to the salary prescribed for the class to which demoted.

(1) If the salary of the employee is reduced for cause or disciplinary reasons, the employee shall receive the salary at the same step prior to promotion.

(2) If the salary of the employee is reduced through no fault of the employee (i.e., layoff), the salary at demotion shall be at the nearest lower salary to that which was received prior to the demotion.

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14.6 Transfer

An employee may be transferred from a class in one department, or to a position of t he same class in another depart ment, or to a comparable class, with the approval of both the employee and Department Heads. In the case of a comparable class, the employee must be qualified, as determined by the Director of Human Resources . The Director of Human Resources, in making such a determination, must assure that the maximum salary rate for the classes in question must be equal to or less than the employee’s current top step salary, and shall consider, among other things, whether the employee possesses the minimum qualifications for such class, and is able to demonstrate through education, experience, or successful completion of pertinent test s, that they are qualified for the transfer. If the transfer involves a change from the jurisdiction of one appointing authority to another, both must consent thereto.

14.7 Acting Pay

(a) General Provisions . Any employee in this unit who is assigned by a supervisor to work in a higher paid classification for two (2) or more hours in one (1) day, shall receive the rate of pay in the step of the higher classification which would have been received if the employee had been promoted into that classification, or at least five percent (5%) more than the employee's salary in the present classification, whichever is greater. Out -of-class assignment pay during overtime status will commence at the first hour worked.

(b) When there is an existing promotional eligibility list, and acting pay assignment is expected to be for more than twenty (20) work days, acting pay shall be assigned from the top three (3) on the promotional eligibility list. If the assignment is for twenty (20) work days or less, the highest ranking employee on the promotional list within the division shall be assigned. When there is no eligible list, section (c) below shall apply.

(c) If there is no existing list, acting pay selection shall be made from the five (5) most qualified employees in the section.

(1) Sections are defined, for the purpose of this clause only, as the sub -groups listed :(a) Water, (b) Sewer, (c) Wastewater Operations, and (d) Wastewater Maintenance; and

(2) Qualifications for the purpose of this section, as determined by the department head or designee, shall include all the following equal factors:

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the vacant position.

(b) Worker experience relative to the vacant position.

(d) Certificates or other formal qualifica tion devices such as eligibility lists.

If all things are equal based on above factors, the seniority within the City shall be considered.

(3) The opportunity for acting Pay shall be rotated among the five (5) most qualified employees within each section.

(d) Assignments from other than a promotional eli gibility list shall not exceed one-hundred and twenty (120) days per fiscal year per employee.

14.8 Temporary Upgrade Pay
Employees who are assigned to temporarily perform the duties of other employees of a higher level classification shall be paid the hourly or daily rate of the classification to which they are temporarily upgraded. To be eligible for temporary upgrade pay, the employee must perform the full scope of duties of the higher classification and must not perform any of the duties of their own job classification while working in the higher level classification.

14.9 Special Assignment Pay

The City Manager may approve additional compensation in an amount not to exceed one additional salary step when an employee is assigned in writing by the supervisor to perform additional duties and responsibilities for the duration of the special assignment.

Any Senior Plant Operator who is assigned in writing by an appropriate authorit y to assume supervisory authority over another Senior Plant Operator shall receive an additional five percent (5%) special assignment pay per shift when so assigned.

Section 15. Severability of Provisions
If any provision of this MOU is declared by a court of competent jurisdiction to be illegal or unenforceable that provision of the MOU shall be null and void but such nullification shall not affect any other provisions of this MOU, all of which other provisions shall remain in full force and effect.

In the event that Federal legislation changes the current applicability of the FLSA, both parties agree to consult and/or confer on the impacts of such legislation to the extent EXHIBIT 1

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required by law.

Section 16. Past Practices and Existing Memoranda of Understanding Continuance of working conditions and practices not specifically authorized by ordinance or by resolution of the City Council is not guaranteed by this MOU.

This MOU supersedes all existing Memoranda of Understanding between the City and the Union.

Section 17. Scope of Agreement
Except as otherwise specifically provided herein, this MOU including Appendices “A”, “B”, “C”, and “D” which are attached to this Agreement and by this reference incorporated herein, and fully and completely incorporates the understanding of the parties hereto and constitutes the sole and entire agreement between the parties on any and all matters subject to meeting and conferring. Neither party shall, during the term of this MOU, demand any change therein nor shall either party be required to negotiate with respect to any matter; provided that nothing herein shall prohibit the parties from changing the terms of this MOU by mutual agreement.

Section 18. Duration of Agreement
All provisions of this MOU are effective the date of execution unless otherwise indicated through June 30, 2029.

Section 19. Maintenance of Operations/City Rights
(a) It is recognized that the need for continued and uninterrupted operation of City services is of paramount importance. The Union and each employee represented thereby agreesthrough exhaustion of the impasse process/mediation/fact finding as set forth in the Employer/Employee Relations Resolution Section 12 (g) the Union or any person acting in its behalf, or each employee in a classification represented by the Union, will not cause, authorize, engage in, encourage, or sanction a strike, unfair labor practice strike, or sympathy strike, work stoppage, slowdown, refusal of overtime work, refusal to operate designated equipment (provided such equipment is safe and sound), or picketing, other than informational picketing, against the City or the individual or concerted failure to report for duty or abstinence from the full and faithful performance of the duties of employment, including compliance with the request of another labor organization or bargaining unit to engage in such activity in an attempt to induce a change in wages, hours, and other terms and conditions of employment.

(b) The Union recognizes the duty and obligation of its representatives and members to comply with the provisions of this MOU and to make every effort toward inducing all employees in this unit to fully and faithfully perform their duties. In the event of any activity prohibited by subsection (a) hereinabove, the Union agrees to take supererogatory steps necessary to assure compliance with this MOU.

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Section 20. GPS Policy, Rest Periods, New Standby List
The parties agree to hold Meet and Confer meetings to discuss the Global Positioning System (GPS) Policy, Rest Periods, and a new Standby List proposed by the O&M unit during negotiations. The parties will hold separate meetings and must mutually agree before any changes may be implemented.

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IN WITNESS WHEREOF this Memorandum of Understanding was ratified by a membership vote of the Association on _________________, and by an affirmative vote of the Stockton City Council on _____________ _. The parties hereto have executed this Memorandum of Understanding this _________day of ______________.

OPERATIONS AND MAINTENANCE UNIT

Approved as to form:

CITY OF STOCKTON
Operating Engineers’ Local No. 3

By: _______________________

MICHAEL DEANDA
Business Representative

APPROVED AS TO FORM:

By: ______________________________

JOHNNY FORD
City Manager

By: ______________________________

MARIE GUILLORY-JONES
Interim Director of Human Resources

By: ______________________________

CHE JOHNSON
Negotiator for the City

Approved as to form:

By: _______________________
DONALD A. LARKIN
Interim City Attorney

ATTEST:

CITY CLERK

______________________________

KATHERINE ROLAND
City Clerk
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Appendix A. Salary Schedule Effective September 20, 2026 Title Group 1 2 3 4 5 6 7 8 9
Chemist O&M - BO $77,017 $80,880 $84,921 $89,159 $93,612 $95,952 $98,351 $100,810 Collection Systems Operator
(Entry Level) O&M - BO $60,564 $63,580 $66,770
Collection Systems Operator
(Journey Level) O&M - BO $70,100 $73,604 $77,283 $79,215 $81,195 $83,225 Electrical Technician (Entry
Level) O&M - BO $76,361 $80,286
Electrical Technician
(Journey Level) O&M - BO $84,412 $88,752 $90,970 $93,245 $95,576 Environmental Control
Officer (Entry Level) O&M - BO $78,546 $82,475
Environmental Control
Officer (Journey Level) O&M - BO $87,931 $92,329 $94,637 $97,003 $99,428 Hydrant Worker O&M - BO $51,625 $54,278 $57,068 $60,002 $63,086 $64,663 $66,279 $67,936 Laboratory Technician O&M - BO $65,909 $69,193 $72,658 $76,286 $80,112 $82,115 $84,167 $86,272 Microbiologist O&M - BO $82,758 $86,908 $91,250 $95,804 $100,589 $103,103 $105,681 $108,323 Plant Maintenance Machinist O&M - BO $85,883 $90,175 $94,685 $99,412 $104,397 $107,007 $109,682 $112,424 Plant Maintenance Mechanic
(Entry Level) O&M - BO $80,255 $84,272
Plant Maintenance Mechanic
(Journey Level) O&M - BO $88,484 $92,910 $95,232 $97,613 $100,054 Plant Maintenance Worker O&M - BO $57,621 $60,517 $63,536 $66,701 $70,051 $71,802 $73,597 $75,437 Plant Operator (Entry Level) O&M - BO $72,960 $76,597 $80,430 $82,440 $84,501 $86,614 Plant Operator (Journey
Level) O&M - BO $84,459 $88,665 $93,107 $95,435 $97,820 $100,266 EXHIBIT 1

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Title Group 1 2 3 4 5 6 7 8 9
Plant Operator-in-Training O&M - BO $69,777 $73,364 $77,135 $81,099 $85,268 Senior Collection Systems
Operator O&M - BO $88,890 $95,557 $97,946
Senior Electrical Technician O&M - BO $98,548 $103,613 $106,203 $108,858 $111,580 Senior Environmental
Control Officer O&M - BO $109,470 $114,946 $117,819 $120,765 $123,784 Senior Hydrant Worker O&M - BO $63,311 $66,565 $69,987 $73,584 $77,366 $79,300 $81,283 $83,315 Senior Plant Maintenance
Mechanic O&M - BO $99,413 $104,397 $107,007 $109,682 $112,424 Senior Plant Operator O&M - BO $88,292 $92,695 $97,612 $102,777 $108,227 $110,932 $113,706 $116,548 Senior Water Systems
Operator O&M - BO $92,614 $99,560 $102,049
Water Field Technician O&M - BO $55,531 $58,310 $61,220 $64,280 $67,490 $70,869 $72,641 $74,457 $76,318 Water Systems Operator
(Entry Level) O&M - BO $66,346 $69,650 $73,145 $74,974 $76,848 $78,770 Water Systems Operator
(Journey Level) O&M - BO $76,793 $80,632 $84,662 $86,778 $88,948 $91,171 Water/Sewer Equipment
Operator O&M - BO $71,273 $74,823 $78,580 $82,504 $86,615 $88,780 $91,000 $93,275 EXHIBIT 1

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Appendix B. Side-Letter of Agreement
Exhibit A & B Employees
Provisions in this APPENDIX B Side Letter of Agreement pertain only to Employees identified in Exhibit A . However, nothing contained herein prohibits the parties from mutually agreeing to changes, but neither party can be compelled to negotiate and/or agree to any changes to this Appendix B, Side-Letter of Agreement.

Section 1 – Re-employment and Employment

The City shall provide regular full -time employment at the City’s municipal wastewater utility and water utility to all of the employees listed in Agreement electing to accept such employment effective March 1, 2008.

Section 2 – Terms and Conditions of Re-employment and Employment

(a) City’s offer of employment and re-employment shall be unconditional, and shall not be subject to other health, competency or other test, fact, or circumstances relating to an individual employee.

(b) All service with OMI/Thames Water will be counted as service with the City.

(c) Waste Water Certification – Employees outside of the Waste Water Division who hold Waste Water II or higher certification and are available for short -term assignment to the waste water facility will receive an additional five percent (5%) of the top step, which shall be PERS reportable earnings. Certification must be kept current. Employees who decline short -term assignments to the waste water facility subject to department guidelines will lose this additional pay.

Section 3 – Supplemental Retirement Contribution and Benefit

The City shall contribute an amount necessary to fund a supplemental retirement benefit for Exhibit A employees. The supplemental retirement benefit shall be developed and administered by the Public Agency Retirement Services (“PARS”) benefit and shall be based on the following criteria:

(a) Only employees listed in Exhibit A shall be eligible to participate;

(b) Commencing March 1, 2008, employees must complete at least one (1) year of continuous City of Stockton service to be eligible for the PARS benefit;

(c) The PARS benefit shall be paid only to those employees listed in Exhibit A who retire from the City in accordance with rules and criteria established pursuant to PERS and the MOU in effect between the City and the OE3; EXHIBIT 1

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(d) The benefit level paid to each eligible employee shall be based on their retirement category as identified in Exhibit A based on the following formula:

(1) Categories 1, 2 and 3 : All actual years of service (prior City of Stockton only, OMI and City of Stockton years of service as of March 1, 2008 prospectively) x 0.6%.

(2) Category 4: Actual years of service with OMI x 2.0%; actual years of service with City of Stockton as of March 1, 2008 prospectively x 0.6%.

Benefits shall accrue and be paid in accordance with the PARS plan document adopted by City Council.

Section 4 – Compensation and Benefits – Exhibit B Employees Only

Employees identified in Exhibit B shall receive fully paid employee City Health Plan (Medical, Vision, and Dental) or the option of the fully paid OE3 Medical Plan Schedule A through June 30, 2013. Effective June 30, 2013, employees identified in Exhibit B shall receive the same city contribution towards cost of insurance programs as stated in MOU section 13.1(c).

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Appendix B – Exhibit A Employees

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OPERATIONS AND MAINTENANCE UNIT SUCCESSOR MOU
TERM: JULY 1, 2026 - JUNE 30, 2029

CITY OF STOCKTON 47
Appendix B – Exhibit A Employees

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OPERATIONS AND MAINTENANCE UNIT SUCCESSOR MOU
TERM: JULY 1, 2026 - JUNE 30, 2029

CITY OF STOCKTON 48
Appendix B – Exhibit A Employees

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OPERATIONS AND MAINTENANCE UNIT SUCCESSOR MOU
TERM: JULY 1, 2026 - JUNE 30, 2029

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Appendix B – Exhibit B Employees

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OPERATIONS AND MAINTENANCE UNIT SUCCESSOR MOU
TERM: JULY 1, 2026 - JUNE 30, 2029

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Appendix B – Exhibit B Employees

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CITY OF STOCKTON 51
Appendix C. Side Letter of Agreement
Longevity Incentive

1. The provisions of this APPENDIX C Side Letter of Agreement only to Employees identified in the corresponding attachment marked as APPENDIX C and cannot be amended, changed, or deleted unilaterally by either party. However, nothing contained herein prohibits the parties from mutually agreeing to changes, but neither party can be compelled to negotiate and/or agree to any changes to this Side Letter of Agreement.

2. Effective March 1, 2008, employees identified in APPENDIX C shall be entitled to receive the amounts noted for each year of service up to a maximum of 5 years. The total amounts shown are intended to be paid on a monthly basis by the date shown (e.g., for amounts totaling $15,000, $1,250.00 shall be paid monthly, so the total amount noted shall have been paid out by 3/1/2009).

3. Employees listed in APPENDIX C shall be entitled only to the amount earned (in paid status) for that month. If an employee terminates employment or is in an unpaid status for a period less than one month, the amount noted shall be prorated for the days in paid status, including paid sick and annual leave. Employees shall not be entitled to payment not earned (unpaid leaves of absences, termination).

4. The amounts noted herein shall not be subject to cost-of-living increases, promotions or other increases to base pay that said employees may earn during the term of this Agreement. Employees who sever their employment relationship with the City and are subsequently reinstated or re-employed, shall not be eligible for any payment herein upon reinstatement or re-employment, except as may be awarded by a court of law or arbitrator.

5. The Longevity Incentive shall be reported to PERS as “PERSable” income by the City.

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Appendix C Longevity Incentive, Maximum Annual Payments

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Appendix C Longevity Incentive, Maximum Annual Payments

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Appendix D. Rates of Pay
Base Rate of Pay: The employees’ Base Rate of Pay is their step as listed on the salary schedule for their classification.

Straight Time Rate of Pay: The employees’ Straight Time Rate of Pay includes the employee’s base rate of pay plus all percentage based add pays.

Regular Rate of Pay: The employees’ Regular Rate of Pay as defined by the Fair Labor Standards Act (FLSA).

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City Council and Concurrent AuthoritiesSeptember 15, 2026

City Council and Concurrent Authorities
September 15, 2026