Palm Desert could lose $8 million flood prevention grant in Newsom's proposed budget cuts

With California government facing a roughly $38 billion projected budget deficit heading into its next fiscal year, the state-level economic woes are already impacting funding for some local governments — including Palm Desert.

An $8 million grant for the city to bolster flood retention basins south of Interstate 10 is in jeopardy after being paused due to Gov. Gavin Newsom’s budget proposal unveiled last month. The area saw considerable flooding and mud damage during Tropical Storm Hilary last year.

The grant, which was recently awarded by the Southern California Association of Governments, stems from the state’s Regional Early Action Planning Grants 2.0 program, or REAP 2.0. But last month, facing the multi-billion-dollar deficit, Newsom proposed cutting the program’s funding in half, from $600 million to $300 million.

Nothing is certain until the state Legislature completes its budget, with a final deadline in June. But for now, the city’s grant project as well as several others have been paused, according to a letter sent to the city from SCAG Executive Director Kome Ajise in late January.

“While SCAG is taking steps to try and secure these funds, until the budget is finalized, we must prepare for the loss of a large portion of our REAP 2.0 funds,” Ajise said in his letter. “Consequently, SCAG is suspending its REAP 2.0 programs during this period of uncertainty.”

The Palm Desert City Council unanimously agreed Thursday to send a letter to California’s legislative leaders urging them to reject the governor’s proposal and protect the REAP 2.0 program, saying the proposal “would be devastating to Palm Desert, as well as numerous other SCAG-region cities, counties, transportation agencies, and tribal governments.”

The letter notes the grant project would support the development of 3,386 housing units currently approved and 1,663 units under review in the growing northern region of Palm Desert.

“While we recognize the incredible budget challenge the Legislature now faces, REAP 2.0 must beprotected if we are to meet our ambitious climate, housing, and mobility goals,” Mayor Karina Quintanilla wrote in the letter.

“REAP 2.0 was designed to remove the systemic barriers for developers to build units where needed and planned,” the letter continues. “Reducing or delaying funding will compromise the program's integrity and have severe, negative impacts on Palm Desert and the rest of the cities and counties across Southern California.”

The city's letter notes other initiatives in the region awarded through the program, such a project by LA Metro to support as many as 10,000 new housing units on surplus LA Metro transit lands, a low-to-zero-interest loan program to expedite accessory dwelling units in Orange County and infrastructure upgrades to support nearly 5,000 housing units in Rialto.

City planning for growth

In Palm Desert, the $8 million grant would allow the city to put together a capital improvement project for the growing area south of Interstate 10 and north of Frank Sinatra Drive, Assistant City Manager Chris Escobedo told The Desert Sun last month.

“We're going to be looking at adding retaining walls to help the conveyance of water along that channel so it properly flows down into the channel to the southeast,” Escobedo said. “Additionally, we're going to be looking at detention ponds and basins throughout that area.”

“Essentially, (what) we want to make sure is that the water flowing from the west continues to flow all the way east, along that corridor and through the city, because it ultimately ties into the regional flood control system,” he added.

The grant was announced several months after Tropical Storm Hilary struck the Coachella Valley in August, causing major flooding in Cathedral City and elsewhere. Much of Palm Desert emerged without major impacts, but Hilary caused severe damage to the city’s Spanish Walk neighborhood near the interstate, displacing a handful of residents and filling some homes with mud and floodwater.

The mud and flooding that came into parts of Spanish Walk were caused by overflowing from a mid-valley diversion channel that starts just west of Palm Desert and extends through the city, running alongside the Union Pacific railroad and Interstate 10.

Escobedo said the city has long been looking at ways to bolster its flood control infrastructure amid the growth planned for the area. For example, next to Spanish Walk, a 150-unit affordable housing development has gained city approval, with work underway.

While the grant funding is in flux, other initiatives focused on the city’s flood infrastructure near I-10 are still on track. In December, the council approved a $4.63 million contract to upgrade and expand a major retention basin near the interstate. That project remains on schedule for completion in August, barring any unforeseen circumstances, according to city spokesperson Thomas Soule.

“The City is not aware of any other direct funding streams that would be impacted by the governor's proposed budget,” Soule said in an email.

The governor is required to release his revised budget by mid-May, while the state Legislature must pass its budget bill by June 15.

Tom Coulter covers the cities of Palm Desert, La Quinta, Rancho Mirage and Indian Wells. Reach him at thomas.coulter@desertsun.com.

This article originally appeared on Palm Springs Desert Sun: Newsom budget cuts may cost Palm Desert an $8M flood prevention grant