The Coachella Valley Water District (CVWD) paused a proposal on September 23 to transfer water and wastewater service authority for a swath of unincorporated communities near Desert Hot Springs to the Mission Springs Water District (MSWD), opting to continue the item after extensive opposing public testimony and board debate.
What CVWD Proposed
Staff asked the board to initiate a reorganization that would “divest” CVWD of its water and wastewater powers within Improvement District No. 8 (ID-8) – approximately 58,000 acres encompassing Desert Edge, Sky Valley, and Indio Hills – while retaining the area within CVWD for other services, such as stormwater protection and groundwater replenishment. MSWD would assume water and wastewater duties through an annexation that Riverside County LAFCO would process.
General Manager Jim Barrett stressed the move is “not something CVWD is trying to do unilaterally,” calling Tuesday’s action an application to open discussions with MSWD, the City of Desert Hot Springs (DHS), Riverside County LAFCO and Riverside County. “It’s not binding,” he said.
Staff pointed to the recently completed Nancy Wright Water Reclamation Facility in the MSWD service area and noted that linking ID-8 with DHS growth along the I-10 corridor could reduce costs associated with an isolated CVWD system and provide sewer access for new development. Barrett said the ID-8 system is stand-alone and not connected to CVWD’s main grid.
The staff report also concluded the reorganization is not a “project” under CEQA and, alternatively, would qualify for categorical or “common sense” exemptions because it authorizes no construction; any future projects would undergo separate environmental review.
The Money and Water-Quality Questions
Barrett acknowledged ID-8 faces an estimated $25 million cost to treat hexavalent chromium if the area remains with CVWD, and he cautioned that CVWD’s water rates “will go up” given court scrutiny of tiered pricing. He argued MSWD consolidation could offer blending and interconnection options that lower treatment costs.
Desert Hot Springs Pushes for Near-Term Action
Doria Wilms, City Manager, Desert Hot Springs
DHS City Manager Doria Wilms backed the long-term shift but urged an immediate shared services agreement so several stalled development projects can move forward. She said seven major projects – including roughly 2,200 homes and a one-million-square-foot logistics facility – are waiting on sewer solutions along the city’s main growth corridor from Dillon Road up Palm Drive to I-10.
“The future of Desert Hot Springs’ economic development hinges on decisions that are being made in these meetings,” Wilms said. “Right now, more than 70% of our residents leave the city every day for work and shopping because a plethora of those opportunities simply do not exist there yet. This is not for lack of interest from developers. Over the years, many large and small promising housing, commercial and regional recreation projects have walked away because they couldn’t make the numbers work. The single biggest obstacle has been the lack of sewer infrastructure from the Coachella Valley Water District along our main growth corridor from Dillon Road up Palm Drive to the I-10 Freeway. CVWD’s closest sewer connection within its service area that touches Desert Hot Springs is all the way at Bob Hope Drive, miles from where growth needs to happen in the city of Desert Hot Springs.”
Continuing with the airing of her city’s grievances, Wilms stated, “That is why back in 2021, when Mission Springs Water District began planning its new wastewater treatment plant, our mayor and city staff met with MSWD and CVWD and we pushed then for a shared service agreement similar to the CVWD arrangement that would allow MSWD to provide sewer and CVWD to provide water for projects in the pipeline. This could have been accomplished quickly, literally with the stroke of a pen and would’ve opened the door for development. Instead, after years of discussion, the focus has shifted to a full divestiture of water and wastewater services from CVWD to MSWD, extending all the way to Indio Hills. While the city generally supports this long-term solution, it will undoubtedly take years to complete. If this is the only viable path, we urge that the divestiture, at a minimum, cover the entire Desert Hot Springs sphere of influence.”
Barrett replied that CVWD is open to case-by-case shared-services arrangements – under which CVWD would still plan-check projects, collect development impact fees, and bill customers – while MSWD treats sewage at its plant, with Prop. 218 approvals required to apply MSWD rates in CVWD territory.
Sky Valley, Indio Hills Residents Object
Rural homeowners turned out in force to oppose any handoff.
Buddy Knowles of Sky Valley cited recent sewage spills he said were tied to an MSWD lift station and questioned MSWD’s capacity to manage a larger system. “They lost 11,000 gallons out in the desert,” he said of a Sept. 21 failure.
Architect Sam Tosi described Sky Valley as a low-density, largely septic-served community and requested additional time and clarity on costs. “Everyone has a septic system… We have great concern about being looped into DHS and the development,” he said, urging the board to verify the $25 million chromium-6 figure.
Community council chair Julie Caley argued the change fails the basic test for reassigning a public service “a higher level of service at the same cost or an equivalent service at a lower cost,” and asked that Sky Valley and Indio Hills be excluded if the DHS corridor proceeds. She also criticized communications to the community about the plan, noting many residents learned of it only a week or a couple of days before the hearing.
Resident Mark Stor raised billing and water-quality concerns about MSWD and urged CVWD to finish promised upgrades rather than “walk away.”
Board Deliberation and Next Steps
Directors emphasized that no final decision has been made. One board member suggested that MSWD act first by passing its own resolution to “allow for some of that dialogue.” At the same time, another proposed focusing solely on the DHS I-10 triangle without tying the rest of ID-8 to the deal.
Counsel noted that the process will likely involve a Municipal Service Review tied to MSWD’s sphere of influence change, with Riverside County LAFCO conducting a deliberate, public process. Barrett estimated that, depending on filings, a year is “probably spot on.”
In the end, the board voted to continue the item, signaling that more outreach and analysis would be required ahead.
After the meeting, CVWD and MSWD issued the following public statements:
CVWD Statement:
The CVWD Board of Directors appreciates the public’s constructive input as we begin exploring complex issues that affect multiple municipalities and our shared community.
The Board voted at today’s public meeting to revisit the item regarding an application to the Riverside County LAFCO for review of the potential divestiture of water and sewer services, and the concurrent annexation of a portion of CVWD’s boundaries to Mission Springs Water District. This item will be revisited at a future meeting, following Mission Springs Water District’s discussion and potential vote to initiate a financial and feasibility analysis of the proposed acquisition.
CVWD is committed to working with the community and to operating efficiently and responsibly as we evaluate the course of action that best serves the interests of its customers and the broader community.
Statement from MSWD:
Today’s meeting does not alter our primary focus or our commitment to the residents of Desert Hot Springs and the surrounding communities. Before our board can take any action, MSWD must gather additional information and conduct the necessary due diligence to determine the best path forward for our customer base.
At the staff level, we will continue to support the City of Desert Hot Springs’ economic development efforts while working with the CVWD team to develop a mutually beneficial path forward, whether this results in a service agreement between the agencies or a transfer of service to take part or all of the ID-8 area remains to be determined.
Editor’s note: According to the staff report, MSWD must also consider and adopt a companion resolution before any application advances to Riverside County LAFCO.
About ID-8: CVWD describes ID-8 as a separate, unconnected domestic system serving Desert Edge, Sky Valley and Indio Hills, an isolation that complicates service and contributes to higher per-unit costs.
