At 223 feet below sea level, the Ski Inn on Avenue A in the tiny, windswept town of Bombay Beach is comfortably the lowest drinking establishment in America. From a stool at the bar, patrons can look out at the eastern shore of the Salton Sea, the largest body of water in California.

The Ski Inn and the Salton Sea have featured in films by Anthony Bourdain and John Waters, and been photographed and written about by journalists from all over the world. Yet the lake is both a literal and figurative backwater of California – in the Sonoran desert 120 miles east of San Diego, close to the Mexican border – and its profile locally is almost as low as its elevation.

Bartender Steve Johnson, 53, said he had served honeymooners from Reykjavik and tour groups from Malta, who may have travelled there just to try the Ski Inn’s famous patty melt. “But when I went to open a bank account 40 miles away in Indio, I told the lady there where I was from and the first thing she asked was: ‘Where’s the Salton Sea?’”

People in the wider region may soon be better acquainted with the lake and its contents than they would like. The water is steadily evaporating, exposing a lakebed lined with agricultural chemicals that, whipped up by the desert winds, could send dust clouds filled with a sulphurous stench and the spectre of respiratory disease across a swathe of Southern California.

Dead tilapia float in the Salton Sea, which has been poisoned with farm runoff, aggravated by evaporating waters (EPA)

Last week, engineers broke ground on a $3.5m (£2.3m) project to reflood 420 acres at Red Hill Bay, where the lake has receded more than a mile in recent years. The area will become a wetland habitat for a rich variety of migratory birds, but it is just the first phase in a long-term, state-funded plan to restore more than 35,000 acres of shoreline.

The history of the Salton Sea began with a human error. In 1905, after engineers had successfully diverted the Colorado River into irrigation canals, the water burst its banks and gushed into the desert basin for the two years it took to stem the flow – creating a lake 35 miles long, 15 miles wide and little deeper than a diving pool.

By the mid-century, it had become a leisure destination, popular with visitors from nearby Palm Springs who wanted to fish or sunbathe but didn’t fancy the three-hour drive to the Pacific coast. Frank Sinatra and the Rat Pack raced speedboats. Sonny Bono learnt to water-ski. But the water from the Colorado River is naturally rich with salt and selenium and, as it evaporated, the lake grew increasingly saline, killing the fish and scaring away the tourists.

Dennis Burkett, 65, a Ski Inn regular who has lived in Bombay Beach since inheriting his parents’ trailer 21 years ago, said that as swimmers emerge from the lake and dry off, they quickly develop a crust of salt on their skin. Just like in the mineral-rich Dead Sea, humans float with ease here. “But you can still sink if you’re drunk,” he added.

In fact, the sea was at its deepest in the 1980s, replenished by runoff from nearby agricultural land, but as it has shrunk over the past two decades, it has left soil laced with pesticides open to the air. That process has sped up dramatically since 2003, when the Imperial Irrigation District (IID), which is responsible for the region’s water, agreed a 45-year deal to sell some of its annual share from the Colorado River to San Diego’s water authority.

It’s such a massive lake that any response is going to have to be similarly massive, and that is very expensive <p>Michael Cohen, a Salton Sea specialist at the Pacific Institute</p>

While water that would otherwise end up trickling down to the Salton Sea was diverted to the big city, the state failed to honour a promise to prevent the inevitable shrinkage of the lake, which has only been exacerbated by California’s historic drought, now entering its fifth year.

If the situation continues unchanged beyond 2017, experts have warned, the lake “falls off a cliff environmentally”, at a ruinous cost to the region’s economy and public health. Were the water to dry up entirely, the lakebed could discharge some 100 tons of toxic dust per day, blanketing an area which already has the highest rates of child asthma in the state. Even now, Mr Johnson said, “Everyone’s always sneezing, everyone’s coughing, everyone has runny noses.”

Bombay Beach looks like a town at the end of the world. As a thriving blue-collar retirement community, its population was once in the low four figures. Today it is fewer than 300. Its marina closed 10 years ago as the lake receded, leaving behind derelict jetties and machinery encrusted with mineral deposits. The air smells rank and the grey, moon-like lakebed is littered with desiccated fish carcasses that crunch underfoot.

Sitting behind the counter at Skip’s, a general store on the north shore, a husky-voiced Sherry Garbutt complained of what she called “a Mexican cold”. Her family has run the store, which sells bait and tackle, for decades. “In the Fifties and Sixties we had several types of fish in the lake: croaker, sargo, corvina and tilapia,” she said. “Now we’re down to just tilapia; it’s the only one that can survive in such high selenium. Everything else just died.”

Yet not everything here is dead or dying. Remarkably, the lake continues to provide a vital habitat for more than 400 bird species, as a key layover on the Pacific Flyway migratory path between Alaska and Central America. At the Sonny Bono Wildlife Refuge close to Red Hill Bay, dusk brings a near-deafening chorus of different birdcalls.

It is this sort of wetland habitat that could be the focus of future restoration plans. “Putting water out in the desert is very biologically productive,” said Michael Cohen, a Salton Sea specialist at the Pacific Institute, an environmental study group based in Northern California. “If you simply spread out shallow water around the edges of the Salton Sea, birds will respond very quickly.”

In the past, the lake’s interests have suffered from its location at the geographical and political fringe of California: far from San Diego and Los Angeles, let alone the state capital, Sacramento, where politicians have plenty of other pressing, water-related problems to contend with. It does not help that the local population is largely low-income and 80 per cent Latino.

Over the past decade, community leaders have repeatedly pleaded with lawmakers to deal with the looming environmental disaster. Many believe it was a 2014 petition from the IID, threatening to postpone its annual water transfer to San Diego, that finally persuaded the state to act. Last month, California’s Governor Jerry Brown signed a bill setting up a Salton Sea Task Force with the goal of restoring 12,000 acres of shoreline by 2020, and another 25,000 thereafter.

Bruce Wilcox, Salton Sea policy czar at the California Natural Resources Agency, said a long-term plan is still in the works, but will probably involve turning coastal areas into wildlife-rich wetlands, which may draw new visitors not to water-ski, but to bird-watch. The lake, Mr Wilcox said, “will eventually be a smaller but sustainable body of water with a series of habitats around its edges, and a central brine area that will get increasingly saline”.