Mohave supervisors hear why Golden Valley water allocations now cost about $6,250 each

Steve Letosky, Mohave County director of public works, told the Board of Supervisors on July 21 that Golden Valley Improvement District (GVID) water allocations date to assessments filed in 1990 and a 1991 Arizona Department of Water Resources (ADWR) designation of adequate water supply. GVID originally assigned 4,989 allocations and ADWR’s 1991 adequate water supply amount of 1,400 acre-feet translated to 6,200 allocations in policy documents, Letosky said. Today about 402 unassigned allocations remain available.

The allocations system is a property-right mechanism that lets a parcel connect physically to the district system; Letosky said some “dry lots” appeared after partial parcel splits in the 2000s because the parent parcel carried a single allocation. The board and staff previously limited sales of unassigned allocations to properly zoned parcels, a restriction rescinded in 2018, he said. That change, along with a 2006 policy that applied a 9.3% simple interest back to 1991 assessment values, is part of why the current charge for an unassigned allocation is $6,250, Letosky said.

Why the fee is high: Letosky explained the fee is intended to reflect the capital cost of adding production and storage infrastructure if all 6,200 allocations ever connect. He said the district currently serves about 1,675 meter customers and has adequate production for those customers, but that drilling and bringing a replacement well (well no. 2 replacement in design) and any associated storage would cost in the millions — the replacement well estimate he cited was roughly $2.8 million. Those future infrastructure needs were the principal justification for the present unassigned allocation price, he said.

Board members pressed on affordability. Supervisor Martin said a $6,000–$7,000 upfront cost per household creates a barrier for new homebuilding; Letosky and others responded that developers could purchase existing unassigned allocations or negotiate an excess designation and pay for infrastructure expansion themselves. Letosky said after the new well is constructed and tested, the district’s consultant will run a comprehensive water-system model to guide whether additional wells or storage will be required to serve all allocations.

The presentation included a history of the allocation counts, pricing history and the policy rationale tying allocation fees to the cost of required future well and storage capacity. No board action was taken; the presentation was informational and staff said modeling and design work tied to the well replacement will continue.