Coachella Valley WD approves $569.8m FY27 budget, braces for PFAS and Chromium-6 costs

Coachella Valley WD approves $569.8m FY27 budget, braces for PFAS and Chromium-6 costsThe California district's ambitious capital improvement plan aims to tackle growing infrastructure needs, though board members anticipate upcoming regulatory pressures will force a strategic pacing of future projects.

The board approved a total FY 2027 budget of $569.8 million, marking a 12.3% increase driven primarily by capital expenditures.

The capital improvement plan (CIP) is set at $196.3 million, with significant allocations for stormwater ($33 million) and sanitation (over $20 million).

A new domestic water cost of service study is planned for FY 2027 to incorporate compliance costs for Chromium-6 and PFAS regulations.

Operating expenses will see a reduction following the completion of a 200,000 acre-foot pre-purchase of State Water Project water in FY 2026.

The Coachella Valley Water District (CVWD) board of directors adopted a $569.8 million operating and capital improvement budget for fiscal year 2027 during its June 23, 2026, meeting. The spending plan represents a 12.3% increase over the previous year, driven almost entirely by an expanded capital improvement plan (CIP). Finance staff reported that the final CIP is set at $196.3 million, scaled down slightly from an initially proposed $206 million. The capital budget includes major allocations across the district's enterprise funds, including $33 million for stormwater, over $20 million for sanitation, and $9 million for West Replenishment. While the district is pushing forward with the expansive CIP, board members expressed skepticism about the agency's capacity to execute nearly $200 million worth of projects in a single 12-month period, noting that the district's highest historical completion rate was approximately $108 million. Staff acknowledged the budget is "ambitious" but emphasized that it reflects an accumulation of necessary infrastructure upgrades. Looming water quality regulations heavily influenced the board's long-term financial discussions. The district plans to conduct a new domestic water cost of service study in FY 2027 to establish future Prop 218 rates. Staff confirmed the study is required to incorporate the fluctuating compliance costs associated with Chromium-6 and PFAS regulations, which were not included in the district's 2021 rate study. One board member noted that the impending Chromium-6 and PFAS requirements will likely put a "chokehold" on the district's finances, suggesting that CVWD may need to stretch its proposed CIP projects over an 8-to-10-year period to ensure a "soft landing" for anticipated rate increases. On the operational side, the budget benefits from a major reduction in water purchase expenses. This drop follows the district's successful pre-purchase of 200,000 acre-feet of State Water Project water in FY 2026. The budget also incorporates previously approved maximum rates for the district's replenishment funds, including a 4% rate increase for West Replenishment and a 1% increase for East Replenishment.