Staff Report
City Council
Item No. 3.H
Meeting Date: May 13, 2026
From: John A. Corella, Director of Public Works
Title: Memorandum of Understanding between the City of Cathedral City and Coachella Valley Water District for the Clean State Revolving Fund Septic to Sewer Planning Project
RECOMMENDATION:
To approve a Memorandum of Understanding (MOU) between the City of Cathedral City and the Coachella Valley Water District (CVWD) for the Clean Water State Revolving Fund (CWSRF) Septic-to-Sewer Planning Project; and authorize the City Manager to execute the MOU and any non-substantive amendments consistent with the intent of the agreement.
BACKGROUND:
The Clean Water State Revolving Fund (CWSRF), administered by the California State Water Resources Control Board (SWRCB), provides low-cost financing for a wide range of water quality projects, including septic-to-sewer conversion projects. In August 2024, Cathedral City was awarded $2,474,070 in CWSRF grant funding for the CWSRF Septic-to- Sewer Planning Project (SWRCB Project No. C-06-8696-110; City Project No. C01020) (Planning Project). In February 2025, City Council awarded a Professional Services Agreement to Ardurra, Inc. to support implementation of the Planning Project.
The Planning Project includes evaluating, designing, and developing the required documentation to connect six (6) residential areas currently served by septic systems to public sewer infrastructure. The municipal sewer systems within Cathedral City are owned, operated, and maintained by the Coachella Valley Water District (CVWD) and the Desert Water Agency (DWA). The project proposes sewer connections within both agency service areas, including five (5) unsewered residential areas within the CVWD service area and one (1) unsewered residential area within the DWA service area. A map identifying the project locations and respective service jurisdictions is included as Attachment 1.
The city is serving as the lead agency for the Planning Project and is responsible for preparation of preliminary engineering reports, environmental documentation, plans and specifications, and CWSRF construction application materials. Upon approval of construction funding by SWRCB, CVWD and DWA will each lead construction activities within their respective jurisdictions.
The Planning Project is currently underway and progressing on schedule. In March 2026, the SWRCB accepted the preliminary engineering reports for both service areas and issued the city a notice to proceed (NTP), allowing the city to begin the environmental review and plans, specifications, and estimates (PS&E) phases. The Planning Project is on track for completion in 2027.
To support advancement of the project into the construction funding phase, the city and CVWD have negotiated a Memorandum of Understanding (MOU) to formally define roles, responsibilities, and coordination procedures for the CVWD service area. The proposed MOU (Attachment 2) has been negotiated between the city and CVWD, and both parties have agreed to the terms. On April 28, 2026, the Coachella Valley Water District Board of Directors considered and approved the MOU.
Approval of a MOU is necessary as the city begins compiling and preparing financial documents on behalf of CVWD for inclusion in the CWSRF construction grant application.
The MOU establishes the framework required by SWRCB for coordination, document review, approvals, and future construction responsibilities. A similar MOU is currently being negotiated with DWA and will be brought forward to City Council for consideration at a future meeting.
DISCUSSION:
The proposed MOU between Cathedral City and CVWD establishes a clear framework for cooperation and coordination on the Planning Project within CVWD’s jurisdiction.
Under the MOU, the city will lead and fund all planning activities using CWSRF planning grant funds. This includes preparation of the preliminary engineering report, environmental documentation, plans and specifications, and the draft CWSRF construction grant application for project areas within CVWD jurisdiction. All deliverables will be subject to review and approval by both the State Water Board and CVWD to ensure compliance with regulatory requirements and consistency with CVWD design standards.
The MOU provides that, upon approval of CWSRF construction funding, CVWD will be responsible for bidding, awarding, and managing construction of both the district-owned sewer infrastructure and property owner improvements within its service area. CVWD will also provide construction management, including oversight, inspection, testing, reporting, and compliance with applicable laws, and will accept the completed improvements into its sewer system for long-term operation and maintenance.
The MOU includes provisions to ensure that the project proceeds efficiently and remains eligible for SWRCB funding. Importantly, the MOU establishes that planning-phase costs will be funded through the awarded CWSRF planning grant, while construction costs will be funded and administered by CVWD using CWSRF construction grant funds.
In addition, the MOU outlines a coordinated approach to funding. City and CVWD staff have agreed to pursue an amendment to the planning grant, submitted on February 25, 2026, to support expanded scope elements, including additional pipeline improvements within mobile home park areas and acquisition of necessary utility easements.
The MOU also includes contingency provisions in the event the amendment is not approved, or full construction funding is not secured by CVWD. These provisions provide clarity while maintaining flexibility as the project advances.
Staff recommend that City Council approve a MOU between Cathedral City and CVWD for the CWSRF Septic-to-Sewer Planning Project; and authorize the City Manager to execute the MOU and any non-substantive amendments consistent with the intent of the agreement.
FISCAL IMPACT:
Approval of the MOU will not result in any additional fiscal impact beyond those already contemplated and authorized under the CWSRF Septic-to-Sewer Planning Project.
Planning-related costs, including preparation of engineering, environmental, and grant documentation, are funded through the $2,474,070 CWSRF Planning Grant. The MOU confirms that these costs will be paid by the city using CWSRF planning grant funds.
Construction costs for sewer improvements within the CVWD service area are anticipated to be funded through a future CWSRF construction grant, to be pursued upon completion of the planning phase. Consistent with the MOU, CVWD will be responsible for funding and administering construction using construction grant funds.
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.
Action B-9: Continue to work on Septic to Sewer grant. Make sure Sarah Street is included and other economic development efforts.
ATTACHMENTS:
1. Project Location and Jurisdiction Map
2. MOU between Cathedral City and CVWD for CWSRF Septic to Sewer Planning Project