Staff Report
City Council
Item No. 2.A
Meeting Date: March 25, 2026
From: John A. Corella, Director of Public Works
Title: Fiscal Year 2025-26 Capital Improvements Program Update and Maintenance of Effort (MOE) Programmed Projects Revision RECOMMENDATION:
Staff will present the bi-annual 5-Year Capital Improvement Program (CIP) update and present proposed schedule adjustments for five (5) programmed CIP projects to maintain compliance with the FY 2025–2026 Maintenance of Effort (MOE) funding requirement for discussion and direction.
BACKGROUND:
Cathedral City’s 5-Year Capital Improvement Program (CIP) Plan is a strategic tool for prioritizing and budgeting infrastructure projects based on long-term community needs and available resources. The CIP is developed from the Pavement Management Program (PMP), which evaluates roadway conditions and provides data to guide cost effective maintenance priorities. This ensures street improvement funding is allocated using a clear, objective, and data-driven approach, helping the city make thoughtful decisions about infrastructure investments in a cost-effective manner.
In May 2023, the city completed a comprehensive PMP Implementation Report. This report served as a baseline for evaluating the condition of all 157 miles of city-maintained streets.
Each road segment was assigned a Pavement Condition Index (PCI) score, ranging from 0 (worst) to 100 (new or excellent condition), with the citywide average PCI recorded at 64, classified as “Fair.” This baseline has since guided project selection and funding prioritization in the current 5-Year CIP Plan.
The 5-Year CIP Plan was first presented to City Council on April 23, 2025, outlining planned projects for FY 2025-26 through FY 2029-30. On October 6, 2025, city staff presented an update to highlight recently completed CIP projects and an overview of upcoming projects.
Today, staff will provide the semi-annual update, building upon the information presented in October. Staff will also present recommendations to adjust the 5-Year CIP Plan by advancing certain projects currently planned for future fiscal years to begin in FY 2025-26.
These adjustments are proposed due to delays on three (3) currently programmed projects and to ensure timely use of Maintenance of Effort (MOE) funds in accordance with annual expenditure requirements.
Maintenance of Effort (MOE) funds refer to the minimum level of local funding the city is required to spend annually on street and roadway purposes in order to remain eligible to receive certain state transportation funds, such as Road Maintenance and Rehabilitation Account – Senate Bill 1 (RMRA-SB-1) funds. State requirements ensure that local agencies maintain a consistent level of investment in roadway maintenance so that state funding supplements, rather than replaces, local funding commitments. The proposed schedule adjustments are intended to ensure the city continues to meet these annual expenditure requirements.
DISCUSSION:
FY 2025-26 Capital Improvement Projects
The 5-Year CIP identifies several roadway projects programmed for construction over FY 2025-26 and FY 2026-27. Project selection is based on multiple factors, including Pavement Condition Index (PCI) data from the city’s Pavement Management Program (PMP), the availability of grant and other funding sources, project location, and coordination with roadway improvements completed in previous years. These criteria help ensure the limited resources available are invested with an efficient and balanced approach to roadway maintenance and rehabilitation. Planned investments include:
FY 2025–26:
o$2.6 million for street reconstruction
o$0.8 million for pavement maintenance and repairs
o$6.4 million for traffic signal improvements
oTotal investment: $9.8 million
FY 2026–27:
o$2.7 million for street reconstruction
o$1.1 million for pavement maintenance and repairs
o$1.2 million for traffic signal improvements
oTotal investment: $5 million
A list of projects completed thus far in FY 2025–2026, projects currently in progress, and upcoming programmed projects is attached to this report (Attachment 1). These projects have resulted in the following improvements to the city’s roadway infrastructure:
Infrastructure Improvement Amount Improved
Miles of Roadway Improved 10.6 Miles
Miles of Bike Lanes Added/Improved 5.2 Miles
Pedestrian Crossings Added 2 Crossings
Traffic Signals Added/Improved 61 Traffic Signals
ADA Ramps Upgraded/Added 6 ADA Ramps
Proposed CIP Program Revisions
Three (3) projects programmed into the 5-Year CIP are currently experiencing delays, as explained below.
1. East Palm Canyon Drive Widening, Master Undergrounding Plan (MUP) and Traffic Signal at Cree Road (Construction Programmed FY 2025-26):
The project schedule has been delayed due to several factors, including the need for additional Southern California Edison (SCE) design and plan revisions to incorporate the new traffic signal at the intersection of East Palm Canyon Drive and Cree Road; the need to obtain an additional California Department of Transportation (Caltrans) encroachment permit on State Route 111 within the City of Palm Springs for the undergrounding of SCE facilities along the south side of East Palm Canyon Drive within Cathedral City; the right-of-way acquisition requirements and negotiations associated with the former Elk’s Lodge property; and additional revisions and approvals required by the Coachella Valley Association of Governments (CVAG) to ensure compliance with CV Sync corridor standards.
2. Ocotillo Square Neighborhood Streets (Design Programmed FY 2025-26 and FY 2026-27):
This project is currently programmed to start the design phase and has been strategically deferred to allow coordination with the city’s Septic-to-Sewer Strategic Planning Project currently in progress. The Ocotillo Square neighborhood currently lacks municipal sewer service, and the Septic-to-Sewer project is preparing plans, specifications, and cost estimates, as well as pursuing construction funding to install sewer infrastructure in the area. Coordinating these efforts will allow the city to utilize the engineering work currently being developed for the sewer project (base design), resulting in a more efficient design process for future roadway and sidewalk improvements.
3. Date Palm Drive North of I-10 Widening (Construction Programmed FY 2026-27 and FY 2027-28):
This project is in the design phase and has experienced delays due to unanticipated hydrology design considerations associated with the Willow Hole Outfall (also known as Long Canyon Wash) stormwater crossing near the intersection of Date Palm Drive and Varner Road. Recent hydrologic evaluations have identified potential changes to the design criteria that may affect the proposed project and downstream properties.
Additional technical analysis and coordination with regional agencies, including the Riverside County Flood Control and Water Conservation District (RCFCWD), and the Coachella Valley Water District (CVWD), are required to determine the appropriate design criteria moving forward and to ensure compliance with applicable engineering standards and permitting requirements. City staff, with the assistance of specialized on-call consultants, and stakeholders with their consultants, are actively coordinating with the involved agencies to resolve these design considerations and advance the project design.
The three (3) projects described above are programmed in the 5-Year CIP utilizing Maintenance of Effort (MOE) General Fund resources. Due to the schedule delays associated with these projects, the city may not be able to expend the required MOE funding within the current fiscal year. The city has a commitment to expend approximately $1.5 million in MOE funds during FY 2025–2026 in order to remain compliant with state eligibility requirements associated with transportation funding programs, including the RMRA – SB 1.
As of March 2026, the city has spent or encumbered approximately $200,000 towards this MOE commitment.
To ensure the city continues to meet these annual expenditure requirements, staff are recommending adjustments to the 5-Year CIP program by advancing other eligible roadway improvement projects that can be delivered within the current fiscal year. These adjustments will allow the city to maintain compliance with MOE requirements while continuing to advance priority roadway improvements identified in the 5-Year CIP program.
Staff continually monitor project schedules, funding requirements, and delivery timelines within the Capital Improvement Program to ensure that available funding sources are used efficiently and in compliance with applicable requirements. Adjustments to the CIP schedule are periodically recommended as needed to address project coordination, regulatory requirements, and funding obligations while maintaining progress on priority infrastructure improvements throughout the city.
Staff will continue to work towards completion of the three (3) delayed projects as design and coordination efforts are completed. These three (3) projects will seamlessly shift into the upcoming CIP schedules.
Proposed Projects to be Advanced
To ensure the city meets the FY 2025–2026 MOE expenditure requirement, staff are recommending advancing two (2) roadway improvement projects currently programmed in FY 2026-2027 and FY 2027-2028 of the 5-Year CIP. These projects are eligible for MOE funding, are consistent with the priorities identified in the PMP, and need to be delivered within the current fiscal year. Advancing these projects allow the city to utilize the required MOE funding while continuing to address roadway maintenance needs throughout the city.
Staff recommend advancing the following projects
1. Cathedral Canyon Drive Street Rehabilitation Project.
This project was planned for construction in FY 2026-2027 utilizing MOE funds and includes pavement rehabilitation along Cathedral Canyon Drive from Perez Road to Paseo Azulejo (average PCI = 24).
2. Sunny Sands Neighborhood Pavement Rehabilitation.
This project was planned for construction in FY 2027-2028 utilizing MOE and SB-1 funds and includes pavement rehabilitation improvements along Baristo Road (PCI = 41) from Date Palm Drive to the east end; El Toro Road (PCI = 48), Victor Road (PCI = 53) and Neuma Drive (PCI = 55) from Ramon Road to Baristo Road.
CIP Funding Adjustments
The proposed adjustments require shifting the schedule of these five (5) projects and their associated MOE funding within the 5-Year CIP:
The three (3) projects currently experiencing design or coordination delays will be rescheduled seamlessly in the upcoming fiscal years to reflect updated delivery timelines.
At the same time, the two (2) roadway rehabilitation projects previously programmed for future fiscal years will be advanced to FY 2025–2026 to ensure the city meets the annual MOE expenditure requirement.
These adjustments modify the timing of project expenditures within the 5-Year CIP while maintaining the overall programmed funding levels within the FY 2025-2026 and FY 2026- 2027. The tables below illustrate the current distribution of MOE funding and the proposed revisions resulting from advancing and delaying projects within the CIP schedule.
Table 1 – Current 5-Year CIP MOE Funding Distribution
Project Name 25-26 26-27 27-28 28-29 29-30
Delayed Projects
EAST PALM CANYON MUP & WIDENING $ 900,000
OCOTILLO SQUARE NEIGHBORHOOD STREETS $ 480,000 $ 120,000 DATE PALM N/O I-10 6-LANE $ 525,825 $ 175,275 Proposed Advancing Projects
SUNNY SANDS NEIGHBORHOOD PAVEMENT
REHABILITATION $ 440,000
CATHEDRAL CANYON Perez Rd to Ofelia Bringas
Bridge $ 540,000
TOTAL MOE FUNDS PER FISCAL YEAR $ 1,380,000 $ 1,185,825 $ 615,275 Table 2 – Proposed 5-Year CIP MOE Funding Allocation
(After Schedule Adjustments)
Project Name 25-26 26-27 27-28 28-29 29-30
Delayed Projects
EAST PALM CANYON MUP & WIDENING $ 900,000
OCOTILLO SQUARE NEIGHBORHOOD STREETS (1) $ 120,000 $ 260,000 DATE PALM N/O I-10 6-LANE $ 165,825 $ 535,275 Proposed Advancing Projects
SUNNY SANDS NEIGHBORHOOD PAVEMENT
REHABILITATION (2) $ 840,000
CATHEDRAL CANYON Perez Rd to Ofelia Bringas
Bridge $ 540,000
TOTAL MOE FUNDS PER FISCAL YEAR $ 1,380,000 $ 1,185,825 $ 795,275 Notes:
(1) The Ocotillo Square Neighborhood Streets design was estimated in the amount of $600,000. Staff obtained a proposal for this design in the amount of $380,000. This revised estimate is reflected in Table 2.
(2) The Sunny Sands Neighborhood Project is currently programmed in the 5-Year CIP with $900,000 in SB-1 funding and $440,000 in MOE funds in FY 2027-28. In order to advance the expenditure of MOE funds in the current fiscal year and maintain the project within the limits of available SB-1 funding, staff recommends revising the funding allocation to $840,000 in MOE funds and $500,000 in SB-1 funds.
FISCAL IMPACT:
There is no fiscal impact associated with this action at this time, as the proposed adjustments only modify the timing of projects within the existing 5-Year CIP and maintain the same total funding levels programmed for FY2025-2026 and FY 2026-2027. Staff will return to City Council for approval of construction contract awards as the projects advance and the fiscal impact will be identified at that time.
FIVE-YEAR STRATEGIC PLAN:
Goal B: Community Investment
Objective: Cathedral City roads, gateways, public spaces, and other infrastructure are well planned, designed, constructed, and maintained.
ATTACHMENTS:
1. FY 2025-26 CIP Project Report
2. Cathedral Canyon Project Location Map
3. Sunny Sands Neighborhood Project Location Map