Staff Report
City Council
Item No. 4.C
Meeting Date: September 16, 2026
From: Jesus Gutierrez, Junior Engineer
Title: Contract with Petrochem Materials Innovation, LLC for Fiscal Year 2026- 2027 Rubberized Emulsion Aggregate Slurry Projects
RECOMMENDATION:
To approve a contract with Petrochem Materials Innovation, LLC. (PMI) for $589,571.00 to supply and apply Rubberized Emulsion Aggregate Slurry (REAS) on the Dream Homes Area (C02701), Assessment District (AD) 88-2 Area (C02702), and Cove Lane and Grove Street (C02703), including traffic control and striping replacement; and, approve a fifteen percent (15%) contingency in the amount of $88,435.65 for unforeseeable construction costs, making the total encumbrance $678,006.65; and, authorize the City Manager to execute the required contract documents; and, authorize the City Engineer to request bonds and insurance for the project, and issue the notice to proceed.
BACKGROUND:
Since 2015, the City of Cathedral City has used REAS as the primary pavement maintenance surface treatment to preserve the asphalt on public streets due to its durability and longevity.
The city generally applies REAS every five to seven years to preserve asphalt pavement and to extend the service life of city streets until a complete street reconstruction is necessary.
REAS is a proven pavement preservation treatment widely used by public agencies throughout the western United States. Petrochem Materials Innovation, LLC (PMI) supplies REAS to the City of Los Angeles under a competitively established central mix contract. The City of Cathedral City, along with other cities in the Coachella Valley, is able to “piggyback” on the City of Los Angeles contract and receive the same unit price per gallon for PMI’s material and equipment, resulting in significant cost savings to the city.
DISCUSSION:
Staff are proposing to apply REAS to streets included in the following three projects:
Dream Homes Area REAS Project (C02701)
Assessment District 88-2 Area REAS Project (C02702)
Cove Lane and Grove Street REAS Project (C02703)
Maps identifying the streets and assessment district areas included in the proposed projects are attached to this staff report.
Dream Homes Area REAS Project (C02701)
The scope of work for the Dream Homes Area REAS Project includes the application of Type II REAS and pavement striping on twelve (12) streets within the Dream Homes Neighborhood (Assessment District 2004-01). The twelve streets included in the project have an average Pavement Condition Index (PCI) of 61.4.
This project follows the Dream Homes Neighborhood Crack Repair Project, which was awarded for construction by the City Council in April 2026 and completed by Riverside Slurry Seal, Inc. in June 2026. Together, the Crack Repair Project and the REAS Project will complete the planned street rehabilitation improvements within the neighborhood, as programmed in the FY 2025-2026 and FY 2026-2027 Biennial Budget adopted by the City Council on May 28, 2025.
Assessment District 88-2 Area REAS Project (C02702)
The scope of work for the Assessment District 88-2 Area REAS Project includes the application of Type II REAS and pavement striping on three (3) streets within Assessment District 88-2. The selected streets are:
Verano Road from Avenida Ximino to West End (PCI = 53)
Perlita Road from Pauline Avenue to West End (PCI = 50) Modalo Road from Pauline Avenue to West End (PCI = 59)
Crack sealing on these streets is scheduled to be completed by the Public Works Maintenance Division in September 2026 as part of the city’s Asphalt Crack Sealing Program, prior to the application of the REAS treatment. Cove Lane and Grove Street REAS Project (C02703)
The scope of work for the Cove Lane and Grove Street REAS Project includes the application of Type II Rubberized Emulsion Aggregate Slurry (REAS) and pavement striping on the following streets:
Cove Lane from Cathedral Canyon Drive to West Buddy Rogers Avenue (PCI = 77) Grove Street from Cathedral Canyon Drive to West Buddy Rogers Avenue (PCI = 74) On September 10, 2025, the City Council approved a service agreement between the city and Silver Rock Development, Inc. (Developer) for Grove Street Apartments, to incorporate required REAS improvements along the development frontage into the city’s annual REAS program. The conditions of approval for Design Review No. 23-001 require the developer to crack seal and apply REAS along the project frontage. At the developer’s request, the city agreed to include these improvements as part of the city-led REAS project, with the developer responsible for 100 percent of the cost of the improvements associated with the development frontage.
Crack sealing on Cove Lane and Grove Street is scheduled to be completed by the Public Works Maintenance Division in September 2026 as part of the city’s Asphalt Crack Sealing Program, prior to the application of the REAS treatment.
REAS Application and Construction
PMI evaluated the condition of the proposed streets in coordination with city staff and determined that the REAS application will require an average spread rate of approximately nine square feet per gallon (9 sq. ft./gal.). Based on this evaluation, PMI prepared a cost estimate that includes the REAS material, equipment, labor, traffic control, resident notifications, and replacement of pavement striping.
City staff and PMI will coordinate with local utilities and service providers, including Burrtec and SunLine Transit Agency, to minimize service disruptions and maintain access during construction.
City staff recommend the City Council approve a contract with PMI for $589,571.00 to supply and apply REAS on the Dream Homes Area (C02701), Assessment District (AD) 88-2 Area (C02702), and Cove Lane and Grove Street (C02703), including traffic control and striping replacement; and, approve a fifteen percent (15%) contingency in the amount of $88,435.65 for unforeseeable construction costs, making the total encumbrance $678,006.65; and, authorize the City Manager to execute the required contract documents; and, authorize the City Engineer to request bonds and insurance for the project, and issue the notice to proceed.
ENVIRONMENTAL ANALYSIS:
No environmental impact. A slurry project is Categorically Exempt as it involves work on existing streets and is listed as a Class 1 Exemption under CEQA Guidelines §15301(c).
FISCAL IMPACT:
FY 2026-2027 Capital Improvement Program (CIP)
Dream Homes Area REAS Project (C02701)
The project is included in the Fiscal Year (FY) 2026-2027 Capital Improvement Program (CIP), with a programmed budget of $850,000 in Measure W funds. The cost proposal submitted by PMI for the Dream Homes Area REAS Project is $443,404.54. Staff are proposing to allocate $443,404.54 in available Measure W funds to fund the project. Assessment District 88-2 Area REAS Project (C02702)
The project is included FY 2026-2027 Capital Improvement Program (CIP) with a programmed budget of $162,000.00 from available Measure W funds. The cost proposal submitted by PMI for Assessment District 88-2 Area REAS Project is in the amount of $110,876.05. City staff are proposing to allocate available Measure W funds in the amount of $110,876.05.
Cove Lane and Grove Street REAS Project (C02703)
PMI’s cost proposal for the Cove Lane and Grove Street REAS Project is $35,290.41.
Pursuant to the service agreement between the city and Silver Rock Development, Inc. (Developer), the developer deposited $8,074.15 with the city to fund the REAS improvements associated with the development frontage. Staff are proposing to allocate $27,216.26 in available General Fund Maintenance of Effort (MOE) funds to fund the remaining project costs.
Construction Budget
The overall PMI proposal to complete the FY 2026-2027 Fall REAS Projects is $589,571.00, as summarized below:
Project Amount
Dream Homes Area REAS Project (C02701) $443,404.54
Assessment District 88-2 Area REAS Project (C02702) $110,876.05 Cove Lane and Grove Street REAS Project (C02703) $35,290.41 PMI Cost Proposal $589,571.00
Staff are proposing a fifteen percent (15%) contingency in the total amount of $88,435.65.
The contingency would be funded proportionately from Measure W and General Fund MOE funds based on the respective city-funded project costs, as summarized below:
15% Contingency - Measure W funded projects $83,142.09
15% Contingency – MOE funded project $ 5,293.56
Total 15% Contingency $88,435.65
Including the proposed contingency, the total construction budget for the FY 2026-2027 Fall REAS Projects is $678,006.65, as summarized below:
PMI Cost Proposal $ 589,571.00
15% Contingency $ 88,435.65
Total Construction Budget $ 678,006.65
Proposed Funding Sources
The following table summarizes the budget allocations for the construction of the projects.
FISCAL
YEAR
DESCRIPTION GENERAL
LEDGER
ACCOUNT
CODES
PROJECT
CODE
AMOUNT ONE TIME or
ONGOING
2026-
2027
Dream Homes Area
REAS
(Measure W)
151-100-150-
156-8800-8802 C02701 $ 443,404.54 ONE TIME
2026-
2027
Assessment District 88-
2 Area REAS
(Measure W)
151-100-150-
156-8800-8802 C02702 $ 110,876.05 ONE TIME
2026-
2027
Cove Lane and Grove
Street REAS
(Deposit)
Deposit C02703 $ 8,074.15 ONE TIME
2026-
2027
Cove Lane and Grove
Street REAS
(MOE)
100-100-150-
156-8800-8802 C02703 $ 27,216.26 ONE TIME
2026-
2027
Contingency
(Measure W)
151-100-150-
156-8800-8802
C02701
C02702 $ 83,142.09 ONE TIME
2026-
2027
Contingency
(MOE)
100-100-150-
156-8800-8802
C02703 $ 5,293.56 ONE TIME
2026-
2027 Total $ 678,006.65
FIVE-YEAR STRATEGIC PLAN:
Goal B: Community Investment
Objective: Cathedral City roads, gateways, public spaces, and other city infrastructure are well planned, designed, constructed, and maintained.
ATTACHMENTS:
1. FY 26-27 Fall REAS Project Area Maps
2. PMI Proposal
3. PMI Contract
4. Silver Rock Service Agreement