Staff Report
City Council
Item No. 3.H
Meeting Date: June 10, 2026
From: John A. Corella, Director of Public Works
Title: Amendment Seven to AB 2766 Memorandum of Understanding (MOU) Between CVAG and Member Jurisdictions to Provide Sustainable Funding of the Regional PM10 Street Sweeping Program
RECOMMENDATION:
Approve Amendment Seven to the AB 2766 Memorandum of Understanding (MOU) between the Coachella Valley Association of Governments (CVAG) and its member jurisdictions to increase City and County contributions to 100 percent to provide sustainable funding for the Regional PM10 Street Sweeping Program, extend the agreement term two years through June 30, 2028, and authorize the City Manager to execute Amendment Seven to the AB 2766 MOU.
BACKGROUND:
Coachella Valley and the Salton Sea Air Basin are designated non-attainment areas for PM10, or air particulate matter less than 10 microns. The primary source of PM10 is dust- generating activities like vehicles traveling over paved or unpaved streets and through construction zones. Since the early 1990s, CVAG and its member agencies have cooperated on a Regional PM10 Arterial Street Sweeping Program, one of the most significant air quality control measures that can be taken to reduce PM10 throughout our region. This program has the added benefit of keeping all major streets in the Coachella Valley clean at a low per- mile cost due to economies of scale.
The Arterial Street Sweeping Program is currently funded by three main sources:
1. Grant funding from the South Coast Air Quality Management District (SCAQMD).
2. The Coachella Valley Air Quality Enhancement Fund, managed by Riverside County, also known as COLMAC funds (aka Coachella Valley Air Quality Enhancement Fund).
3. Reallocation of a portion of AB 2766 funds distributed to individual jurisdictions based on vehicle license plate renewals.
The SCAQMD grant is in the amount of $1,150,000 and provides approximately $220,000 annually over a five-year period to support the Arterial Street Sweeping Program. The grant is currently in the fifth and final year of its term and is set to expire in June 2026. SCAQMD is recommending a one-year extension of this grant funding for the Regional PM10 Street Sweeping Program, which would provide an additional $220,000 in funding through June 30, 2027.
The COLMAC funds received by the County are associated with mitigating air pollution impacts from the Colmac power plant in Mecca, CA. Since July 2010, the County has allocated $150,000 each year for the Regional Arterial Street Sweeping Program. However, the Colmac agreement ended in June 2025 following the closure of the Colmac power plant in Mecca, although remaining funds are still available for program use.
The remaining AB 2766 funding sent to cities and counties by the SCAQMD is generated by a surcharge on annual DMV fees and must be used to reduce air pollution generated by motor vehicles. In previous years when funding from other sources tended to fluctuate, AB 2766 contributions from CVAG member jurisdictions ranged from 60% to 100%, which is allocated towards monthly sweeping of arterial streets.
DISCUSSION:
In 2024, the Sixth Amendment to the MOU for this reallocation requested that 75% of AB 2766 funds be directed toward the Regional Arterial Street Sweeping Program. The term of the Sixth Amendment expires on June 30, 2026. With this Amendment Seven, CVAG is requesting that member jurisdictions’ contributions increase to 100% for the next two years, through June 30, 2028. One hundred percent of all funding goes toward the Regional Arterial Street Sweeping Program, which is currently operated by CVAG under contract with Sweeping Corporation of America. Amendment Seven to the MOU was approved by the CVAG Executive Committee on December 1, 2025, and was also reviewed and supported by the CVAG Energy and Sustainability Committee on November 13, 2025.
Increased service levels in recent years, including response to significant wind events and blow sand conditions, have resulted in higher program costs and necessitate a more stable funding structure moving forward. As funding from other sources tends to fluctuate, AB 2766 contributions from CVAG member jurisdictions increase as needed to offset funding reductions and ensure the regional arterial street sweeping program remains fully funded and service levels are maintained throughout the Coachella Valley.
With the expiration of the COLMAC funding source and the pending expiration of the South Coast Air Quality Management District (SCAQMD) grant, increasing AB 2766 contributions to 100 percent is necessary to maintain existing service levels and avoid reductions in regional sweeping operations.
Note that in Cathedral City, residential streets are swept once per month through a contract supported by solid waste fees under the city’s Burrtec franchise agreement. Arterial streets are swept once per month through this regional agreement with CVAG.
For Fiscal Year 2024-2025, Cathedral City received approximately $67,861 in AB 2766 revenue from the South Coast Air Quality Management District (SCAQMD). Under the current MOU, 75% of these restricted funds are allocated to the Regional PM10 Street Sweeping Program through CVAG, while the remaining 25% remains available for eligible local air quality improvement projects. Amendment Seven would increase the allocation to 100%, resulting in the full annual AB 2766 apportionment being directed toward the Regional PM10 Street Sweeping Program. Based on current funding levels, this represents an increase of approximately $16,965 annually being allocated to CVAG. AB 2766 revenues are restricted funds that must be used for eligible mobile-source air quality improvement programs and cannot be used for general governmental purposes. The City currently maintains an available fund balance of approximately $300,000 within Fund 242 (Air Quality Improvement Fund). As part of the upcoming budget development process, the City will evaluate future use of these restricted funds, including whether a portion of the fund balance should be reserved to offset potential future funding reductions associated with the expiration of the COLMAC funding source and uncertainty regarding future grant funding. Approval of Amendment Seven does not diminish, eliminate, or reduce any existing City program or service currently funded through AB 2766 revenues. The regional arterial street sweeping program remains an eligible use of these restricted funds and continues to provide direct air quality benefits to Cathedral City residents.
Staff recommends City Council approve Amendment Seven to the AB 2766 MOU between CVAG and its member jurisdictions to increase city and County contributions to 100% to provide sustainable funding for the Regional PM10 Street Sweeping Program, extend the agreement term two years through June 30, 2028, and authorize the City Manager to execute Amendment Seven to the AB 2766 MOU.
Please note that identical MOU amendments are being circulated to all participating member agencies for approval by their respective governing bodies.
FISCAL IMPACT:
Adequate funding for the Regional PM10 Street Sweeping Program is dependent upon all three funding streams – AB 2766, South Coast Air Quality Management District (SCAQMD) grant funding, and the COLMAC allocation. When one funding source fluctuates, the remaining funding streams offset funding reductions. The CVAG quarterly reimbursement activity is managed through Fund 242, Air Quality Improvement Fund. No additional General Fund impact is anticipated.
FIVE-YEAR STRATEGIC PLAN:
Goal B: Community Investment
Objective: Cathedral City roads, gateways, public spaces, and other infrastructures are well planned, designed, constructed and maintained.
ATTACHMENTS:
1. CVAG Staff Report
2. Amendment Seven