Cave Creek council adopts three-year utility rate increases to shore up water and wastewater funds

Cave Creek — The Town Council on Jan. 8 approved Resolution No. 2026‑01, adopting revised monthly service charges, usage rates and a new rate structure for Cave Creek Water, Desert Hills Water and Cave Creek Wastewater service areas to reduce ongoing general‑fund subsidies and help qualify for future state loan programs. The motion passed on a 6–0 voice vote.

Staff and consultant Kevin Burnett of Willdan told the council the study’s goals included financing many capital projects with debt rather than using the general fund, minimizing cash loans and building required debt‑service reserves to meet WIPA/WIFA loan requirements. As part of the revision, the residential water volumetric tiers are split so the lowest tier becomes 0–4,000 gallons (protecting low users) with subsequent tiers at 4,000–10,000 and higher; the top tier was lowered from greater than 50,000 to greater than 40,000 gallons per month, increasing costs for the very largest users.

Under the adopted plan, staff projected 6% rate increases in each of 2026, 2027 and 2028. The first increase is effective Feb. 5, 2026; the 2027 and 2028 adjustments align with the first full billing period in January of each year. Staff said the changes are intended as an interim update until a more comprehensive rate study can be completed.

Example impacts highlighted in the presentation showed a low‑use residential customer (about 2,400 gallons per month) would see a small change in the bill (from roughly $76 to about $78), an average user (about 13,000 gallons) would see about a 6% increase, while a high user (example: 54,000 gallons) could see increases of 18–22% depending on system and tier placement. Councilor comments emphasized conservation goals and protecting lifeline rates: one councilor said the highest users would be “penalized quite substantially” under the new structure to encourage conservation.

During the public hearing, the council read an online comment from Anne and Paul Teixeira opposing further increases, saying residents were promised lower prices after the town purchased a private system and that continuing increases without corresponding service improvements was unfair.

Council discussion focused on tradeoffs between reducing general‑fund subsidies (including funding emergency services) and the burden on ratepayers. Staff said the modest multi‑year increases were necessary to maintain reliability, meet loan criteria and avoid larger hikes later. Several council members requested that the next, more comprehensive study examine parcel types and actual uses to consider options such as caps or targeted limits for unusually large users.

The resolution directs staff to implement the adopted rates with the timing described and to return with future rate study work as needed.