CITY COUNCIL STAFF REPORT
DATE: JUNE 24, 2026 CONSENT CALENDAR
SUBJECT: APPROVE AMENDMENT NO. 2 TO THE AGENCY REIMBURSEMENT
AGREEMENT BETWEEN THE CITY OF PALM SPRINGS (CITY) AND
COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS FOR THE
SOUTH PALM CANYON DRIVE BRIDGE REPLACEMENT OVER
TAHQUITZ CREEK FOR INCREASED FUNDING COMMITMENTS
FROM: Scott C. Stiles, City Manager
BY: Engineering Services Department
SUMMARY:
Approval of Amendment No. 2 to the Reimbursement Agreements between the City of Palm Springs and the Coachella Valley Association of Governments (CVAG) will increase CVAG’s Regional Arterial Program funding contribution from $865,326 to $2,125,717.50.
This represents an increase of $1,260,391.50 to cover higher construction costs resulting from increased preliminary engineering, unforeseen coordination requirements, cultural monitoring, right-of-way constraints and additional management fees.
RECOMMENDATION:
1) Approve Amendment No. 2 to Agreement No. 6530, a Reimbursement Agreement with CVAG, increasing funding for Construction and Construction Management services for the South Palm Canyon Drive Bridge Replacement over Tahquitz Creek, City Project No. 12-02, federal aid Project No. BRLS 5282(042) and; 2) Authorize the City Manager to execute all necessary documents.
BACKGROUND:
The South Palm Canyon Drive Bridge (State Bridge No. 56C0408), originally built in 1930 and widened in 1956, was identified in a 2009 Bridge Inspection Report as “Structurally Deficient.” This designation indicated inadequate structural redundancies and qualified the bridge for federal funding for rehabilitation or replacement from California’s Department of Transportation (“Caltrans”) Federal Highway Bridge Program (HBP). The project is now under construction, and the original bridge structure has been completely removed.
City Council Staff Report
June 24, 2026 - Page 2
Approve Amendment 2 to CVAG Reimbursement Agreement 6530 for CP 12-02 Caltrans provided funding through the HBP program to support the design and construction of this bridge, as well as several other bridges within the City of Palm Springs that are included in the adopted CVAG Transportation Project Prioritization Study (TPPS).
Under this funding commitment, Caltrans agreed to cover 88.53% of all eligible project costs. The remaining local match, along with any project expenses not eligible under the HBP program, is to be shared between CVAG and the City of Palm Springs based on a 75% / 25% cost split. Caltrans typically programs funding for the full project, including all phases, when incorporating it into the HBP program.
On January 27, 2014, the CVAG Executive Committee approved the Original Reimbursement Agreement, establishing CVAG’s initial contribution of $76,476 for the preliminary engineering (PE) phase of the project.
On April 24, 2017, after Caltrans approved increasing the HBP Share to a total of $8,118,200, CVAG’s Executive Committee approved Amendment No. 1 to the Reimbursement Agreement. This amendment increased CVAG’s contribution by a not- to-exceed amount of $788,850 for additional preliminary engineering costs and added funding commitments for the Right of Way and Construction phases. The City subsequently approved the amendment on June 7, 2017.
On October 10, 2024, City Council awarded a construction contract to Riverside Construction, Inc., and a Construction Management Services contract to Harris & Associates, Inc.
On March 4, 2026, the City of Palm Springs submitted a request to CVAG for approval of Amendment No. 2 to the Agency Reimbursement Agreement for the South Palm Canyon Drive Bridge Replacement Project over Tahquitz Creek. The amendment increases the Regional Arterial Program funding allocation from $865,326 to $2,125,717.50, an increase of $1,260,391.50. CVAG approved the amendment on April 27, 2026. The request letter and Amendment No. 2 are included as Attachment A.
STAFF ANALYSIS:
As of the date of this report, construction is approximately 50% complete. The increase in project costs reflects both project-specific challenges and broader regional construction market conditions, including cost increases in materials, and increased labor costs since the project's original 2017 cost estimates were established. Project cost drivers include higher preliminary engineering expenses stemming from greater than expected permitting and review fees, unanticipated interagency environmental coordination, and revisions required to address right-of-way constraints related to utility conflicts along the project corridor. Construction costs have also increased to reflect current market bid prices and to incorporate cultural monitoring, which was required by regulatory agencies under Section 106 of the National Historic Preservation Act. CVAG's approval of Amendment No. 2 was granted by their Executive Committee on April 27, 2026, affirming their commitment and partnership with the City to the project.
City Council Staff Report
June 24, 2026 - Page 3
Approve Amendment 2 to CVAG Reimbursement Agreement 6530 for CP 12-02 The Project’s current funding summary including all funding sources is summarized in Table 1 below.
Table 1
Funding Source Funding Amount
Federal Highway Bridge Program: $13,611,000.00
Desert Water Agency: $876,710.00
Southern California Gas: $30,000.00
CVAG Funding Share: $2,125,717.50
City Funding Share: $708,572.50
Total Costs: $17,352,000.00
ENVIRONMENTAL ASSESSMENT:
In accordance with the California Environmental Quality Act (“CEQA”) Guidelines the requested City Council action is not a “Project” pursuant to Section 15378(b)(5).
Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment are not considered a “Project”.
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the following City Council Strategic Plan Broad Goal: Infrastructure and Facilities.
FISCAL IMPACT:
This amendment will allow the City to accept and utilize the CVAG Regional funds. The Federal Highway Bridge Program (HBP) will continue to fund 88.53% of all eligible project costs. The remaining 11.47% match, along with any non-HBP eligible costs, will be funded locally. In accordance with CVAG policy, 75% of these locally funded costs will be covered by Regional Measure A funds, and the City’s 25% share will be funded with local Measure A funds. The City’s required contribution is available in the project’s budget.
REVIEWED BY:
Department Director: Joel Montalvo
Assistant City Manager: Flinn Fagg
Director of Finance: Kristopher J. Mooney
City Manager: Scott Stiles
ATTACHMENTS:
A. Attachment A – Letter from the City to CVAG and Amendment No 2.