Staff Report
City Council
Item No. 3.I
Meeting Date: October 14, 2026
From: Armando J. Garcia Baldizzone, City Engineer
Title: Approval of a Budget Adjustment to the HSIP Cycle 11C Traffic Signal Hardware Upgrades Project (C08756), and Approval of Amendment No. 1 to the Professional Service Agreement with RT Engineering and Associates Inc.
RECOMMENDATION:
Approve a budget adjustment to the HSIP Cycle 11C Traffic Signal Hardware Upgrades Project (C08756), utilizing Highway Safety Improvement Program (HSIP) funding awarded by the California Department of Transportation (Caltrans); and authorize the City Manager to execute Amendment No. 1 to the Professional Services Agreement with RT Engineering and Associates Inc. for additional construction engineering services necessary to complete the project.
BACKGROUND:
The Highway Safety Improvement Program (HSIP) is a federal-aid program administered by the California Department of Transportation (Caltrans) that provides funding to state, local, and tribal governments for infrastructure projects and programs designed to achieve a significant reduction in traffic fatalities and serious injuries on all public roads.
In March 2023, Cathedral City was awarded $1,007,730 in HSIP Cycle 11 grant funding for the design and construction of traffic signal hardware upgrades at 49 signalized intersections (Project). The improvements include the installation of LED safety lighting, internally illuminated street name signs (IISNS), and traffic signal backplates with retroreflective borders at 49 signalized intersections throughout the city. A map with the proposed intersections is attached to the report for reference as Attachment 1.
In June 2024, the City Council awarded a professional services agreement to STC Traffic, Inc. (STC), to prepare the plans, specifications, right-of-way, and environmental documentation for the project. In December 2024, a cost change request was submitted to Caltrans to address increased costs associated with the internally illuminated street names signs (IISNS). At Caltrans’ direction, the IISNS were subsequently removed from the project scope. STC completed the project design in June 2025.
On October 6, 2025, the City Council authorized a total project budget of $838,800.00 for the HSIP Cycle 11C Traffic Signal Hardware Upgrades Project (C08756). The authorized budget included a construction contract with Econolite Systems, Inc. in the amount of $564,709.40; a professional services agreement with RT Engineering and Associates, Inc. (RTEA) in the amount of $134,229.04 for construction engineering support services; and a 20% contingency of $139,861.56 for unforeseen construction and construction engineering costs.
On January 28, 2026, prior to the start of construction, the City Council approved Change Order No. 1 to Econolite Systems, Inc. in the amount of $107,129.84 for the replacement of obsolete traffic signal heads and an additional 30 working days. The City Council also approved a revised budget that included a 10% project contingency and a budget adjustment of $47,875.11, increasing the total authorized project budget from $838,800.00 to $886,675.11.
Construction began on March 2, 2026. On April 6, 2026, construction activities were suspended due to extended material delivery lead times. Construction resumed on August 4, 2026, following delivery of the required materials, with construction anticipated to be completed by October 19, 2026.
DISCUSSION:
Due to the extended construction schedule, RTEA has requested additional contract funds to continue providing construction inspection services through completion of construction and to perform the required project closeout activities thereafter. RTEA submitted a revised cost proposal requesting an additional $65,827.36 for these services.
Following review of RTEA’s revised cost proposal, city staff evaluated the available project funding and determined that sufficient funds were available within the construction phase of the HSIP grant to fund the proposed RTEA amendment and provide an additional $15,000 for administrative support services provided by NAI Consulting, Inc. (NAI).
On August 13, 2026, city staff requested that Caltrans reallocate $80,828 from construction to construction engineering to provide the additional funding necessary for RTEA’s construction engineering services and NAI’s administrative support services. Caltrans approved the funding reallocation on August 21, 2026. Caltrans’ approval is included as Attachment 3.
Amendment No. 1 to the professional services agreement between RTEA will increase the total not-to-exceed compensation by $65,827.36, from $134,229.04 to $200,056.40, and extend the term of the agreement by two (2) months, through December 6, 2026. The additional contract amount and time will allow RTEA to provide construction engineering services through completion of construction and perform the remaining project closeout activities. The proposed amendment is included as Attachment 2.
Staff recommend that the City Council approve a budget adjustment to the HSIP Cycle 11C Traffic Signal Hardware Upgrades Project (C08756), utilizing Highway Safety Improvement Program (HSIP) funding awarded by the California Department of Transportation (Caltrans); and authorize the City Manager to execute Amendment No. 1 to the Professional Services Agreement with RT Engineering and Associates Inc. for additional construction engineering services necessary to complete the project.
FISCAL IMPACT:
1) HSIP Cycle 11 Grant Funding
The HSIP Cycle 11C grant included $1,034,700.00 in eligible funding for the construction phase of the project. The table below summarizes the original funding allocation and the revised allocation following Caltrans’ approval of the $80,828 reallocation from construction to construction engineering.
Finance Items Original Revised
Construction $899,700.00 $818,872.00
Construction Engineering $135,000.00 $215,828.00
Available HSIP Grant Funding $1,034,700.00 $1,034,700.00 In accordance with HSIP Cycle 11 funding requirements, eligible costs are funded with 90% HSIP funds and a 10% local match. Based on the revised allocation approved by Caltrans, the table below summarizes the HSIP and local funding shares.
Finance Items Cost HSIP
(90%)
Local Match
(10%)
Construction $818,872.00 $736,984.80 $81,887.20
Construction Engineering $215,828.00 $194,245.20 $21,582.80 Totals $1,034,700.00 $931,230.00 $103,470.00
2) Authorized Construction Budget
On January 28, 2026, the City Council authorized a construction budget of $886,675.11, which included a construction contract with Econolite Systems, Inc., change order No. 1, the professional services agreement with RTEA for construction engineering services, and a 10% contingency. The authorized construction budget is summarized below.
Construction Bid Amount (Econolite) $564,709.40
Change Order No. 1 $107,129.84
Construction Engineering Cost (RTEA) $134,229.04
Revised Construction Cost $806,068.28
10% Contingency $80,606.83
Authorized Construction Budget $886,675.11
3) Additional Project Expenditures
Amendment No 1 with RTEA for Construction Engineering Services Amendment No. 1, in the amount of $65,827.36, will increase the professional services agreement with RTEA from $134,229.04 to a total not-to-exceed amount of $200,056.40, as summarized below.
RT Engineering and Associates Inc. Agreement $134,229.04 Amendment No. 1 $65,827.36
Revised Agreement Amount $200,056.40
NAI Administrative Support Services
NAI Consulting, Inc. (NAI) was awarded a task order for $8,973.00 to provide administrative support services for the project. To date, NAI has expended $4,253.50, leaving a remaining encumbered balance of $4,719.50.
As part of the Caltrans-approved funding reallocation, an additional $15,000 has been allocated for NAI’s continued administrative support services through project completion and closeout.
4) Available Funding Sources
HSIP Cycle 11 Funds
The city was awarded $931,230.00 in HSIP Cycle 11 funds for the construction phase of the project. To date, the City Council has authorized $798,007.60 in HSIP funds, leaving $133,312.40 available.
Awarded HSIP Funds $931,230.00
Council Authorized HSIP Funds ($798,007.60)
HSIP Funds Available $133,222.40
Measure A Funds
In the FY 2025-26 CIP, $209,500.00 in Measure A Funds were programmed for the project.
To date, the City Council has authorized $88,667.51 in Measure A funds toward the local match required by the HSIP Cycle 11 grant program, leaving $120,832.49 in programmed Measure A funds available.
Programmed Measure A Funds $209,500.00
Council Authorized Measure A Funds ($88,667.51)
Measure A Funds Available $120,832.49
5) Revised Construction Cost and Budget
The revised project cost, including the construction contract, approved change order, construction engineering services, and administrative support services, is summarized below.
Construction Bid Amount (Econolite) $564,709.40
Change Order No. 1 $107,129.84
Construction Engineering Cost (RTEA) $134,229.04
Amendment No. 1 (RTEA) $65,827.36
NAI Administrative Support Services $15,000.00
Revised Project Cost $886,895.64
As the project is nearing completion, staff recommend a 2% contingency to address minor remaining construction items and any adjustments to quantities or costs identified during final project reconciliation and closeout.
Revised Project Cost $886,895.64
2% contingency $17,737.91
Revised Construction Budget $904,633.55
6) Budget Adjustment Requested
A budget adjustment of $17,958.44 is recommended to increase the authorized construction budget from $886,675.11 to $931,240.42, providing sufficient funding for the revised project costs and the recommended 2% contingency.
Revised Construction Budget $904,633.55
Authorized Construction Budget ($886,675.11)
Budget Adjustment $17,958.44
Staff propose funding the $17,958.44 budget adjustment with $16,162.60 in HSIP Cycle 11 funds, representing 90% of the increase, and $1,795.84 in programmed Measure A funds, representing the required 10% local match. The proposed budget adjustment is summarized below.
FISCAL YEAR DESCRIPTION GENERAL
LEDGER
ACCOUNT
CODES
PROJECT
CODE
AMOUNT ONE TIME or
ONGOING
2026-2027 HSIP Funds
(Grant)
331-100-150-
156-8800-8802 C08756 $16,162.60 ONE TIME
2026-2027 Measure A
(Local Match)
243-100-150-
156-8800-8802 C08756 $ 1,795.84 ONE TIME
2026-2027 Total $17,958.44
FIVE-YEAR STRATEGIC PLAN:
Goal B: Community Investments
Objective: Cathedral City roads, gateways, public spaces, and other infrastructure are well planned, designed, constructed, and maintained.
ATTACHMENTS:
1. Attachment - Project Map
2. Attachment – RTEA Amendment No 1
3. Attachment – Caltrans Approval