Staff Report
City Council
Item No. 3.E
Meeting Date: June 10, 2026
From: John A. Corella, Director of Public Works
Title: Memorandum of Understanding between the City of Cathedral City and Desert Water Agency 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 Desert Water Agency (DWA) for the Clean 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, resulting in more than 1,100 new sewer connections citywide. Approximately 140 of those connections are located within the DWA service area. The DWA project area includes Lakeview Villas Condominiums, identified in 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 service areas.
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.
On May 13, 2026, City Council approved a Memorandum of Understanding (MOU) between the city and CVWD for the portions of the Planning Project within CVWD’s jurisdiction. Since that time, negotiations with DWA have concluded and the City Attorney has approved the proposed DWA MOU. Staff are now bringing the DWA MOU forward for City Council consideration.
Approval of the DWA MOU is necessary as the city continues preparing financial and technical documentation for inclusion in the future CWSRF construction grant application.
The MOU establishes the framework required by SWRCB for coordination, document review, approvals, and future construction responsibilities within DWA’s jurisdiction.
DISCUSSION:
The proposed MOU between Cathedral City and DWA establishes a clear framework for cooperation and coordination on the Planning Project within DWA’s jurisdiction. The MOU is shown in Attachment 2.
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 the project area within DWA jurisdiction. All deliverables will be subject to review and approval by both the State Water Board and DWA to ensure compliance with regulatory requirements and consistency with DWA design standards.
The proposed DWA MOU applies to one (1) sewer conversion area located within DWA’s service area at the Lakeview Villas Condominiums, as shown in Exhibit A of the MOU and included in Attachment 1.
The MOU provides that, upon approval of CWSRF construction funding, DWA will be responsible for bidding, awarding, and managing construction of both the agency-owned sewer infrastructure and property owner improvements within its service area. DWA 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.
Similar to the CVWD MOU previously approved by City Council, the DWA MOU includes provisions to ensure that the project proceeds efficiently and remains eligible for SWRCB funding. Planning-phase costs will continue to be funded through the awarded CWSRF planning grant, while construction costs will be funded and administered by DWA using future CWSRF construction grant funds.
The MOU also includes contingency provisions in the event full construction funding is not secured by DWA. These provisions provide clarity while maintaining flexibility as the project advances.
Staff recommend that City Council approve the MOU between Cathedral City and DWA 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 DWA 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 DWA service area are anticipated to be funded through a future CWSRF construction grant, to be pursued during the Planning Project. Consistent with the MOU, DWA 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.
ATTACHMENTS:
1. DWA Project Location Map
2. MOU between Cathedral City and Desert Water Agency for CWSRF Septic-to- Sewer Planning Project