Valley Sanitary District exploring five-year rate hike in anticipation of major projects

Valley Sanitary District is seeking its first rate increase in years, proposing a five-year structure that would raise average residential bills by 12% in each of the first two fiscal years to pay for major projects to upgrade its system and increase wastewater recycling.

District General Manager Jason Dafforn presented the proposed rate structure to the Indio City Council on Wednesday, outlining the plan ahead of a public hearing scheduled for May 12 before the district’s board.

Under the proposal, the average single-family residential bill—currently $753.49 per year—would increase by $7.51 per month in fiscal year 2027 and by $8.41 per month in fiscal year 2028, the two heaviest years of the district’s capital spending cycle.

Rate increases would then drop to roughly $3.12, $3.21 and $3.44 per month for the following three years.

Dafforn said the increases are driven largely by factors outside the district’s control, including rising utility costs, fuel and chemical prices, higher insurance premiums, and aging infrastructure.

“A lot of our infrastructure at the facility and out into the collection system is 80, 90 years old,” Dafforn said.

The district, which serves approximately 91,000 residents across Indio, Coachella, portions of Cathedral City and unincorporated Riverside County, has an operating budget of $22.5 million for fiscal year 2025-26 and a capital improvement program of $22.8 million covering more than 29 projects.

About 50% of every dollar the district receives is reinvested into its capital improvement program, Dafforn said.

“We’ve got facilities that need to be upgraded because of the current state of their condition, and the treatment plant itself,” he said. He added that some employees are working in temporary trailers because they have outgrown existing facilities.

“So for us, and for my board, we think it’s fiscally responsible for us to do it now, because we can control it and we know what it’s going to cost…it sets us up for the next 50, 60, 70 years.”

Separately, the district is pursuing a $15 million Phase 2 recycled water project that would treat 1 million gallons per day and convert it into irrigation-quality water for local golf courses and common areas.

However, Dafforn told the council that construction will not begin until the district secures a guaranteed customer.

Preliminary pricing for the recycled water is approximately $650 per acre foot, compared to roughly $150 to $175 for canal water.

“The intent from our board is that we want to ensure that the customer and or customers—because we have four potential customers—that they will be footing the bill for this facility by way of guaranteed purchases of the water over a 10-, 15-, 20-year period,” Dafforn said. “So that way our rate payers do not subsidize that project.”

Councilmember Oscar Ortiz asked what incentive customers would have to purchase the higher-priced water. Dafforn said the benefit is environmental, noting that using recycled water in place of groundwater preserves aquifer supplies for potable use.

Residents who have received rate notice mailings can attend the May 12 public hearing or find rate information, FAQs and rebate program details on the district’s website. The district also announced its second annual community open house, set for Saturday, April 4 from 10 a.m. to noon.

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