Cave Creek outlines plan to buffer residents from Colorado River cuts using banked credits and exchange deals

Cave Creek officials told residents at a town forum that the community faces planned reductions in Colorado River deliveries and outlined steps the town is taking to limit impacts on customers.

Town staff, utilities experts and a Central Arizona Project (CAP) representative described a strategy combining short-term exchange agreements to recover water the town has stored underground, rehabilitation of municipal wells, and targeted conservation programs. Natalie Mast, water resources and planning manager at CAP, said federal and interstate negotiations are still underway but CAP’s updated forecast for 2027 reduces municipal-industrial (M&I) deliveries by about 14% under the lower-basin proposal—an improvement from earlier planning assumptions of roughly 20% cuts. “We are just in an era where there’s less Colorado River water available,” Mast said.

The nut graf: Why it matters — Cave Creek relies on CAP for roughly 90–95% of its water supply, the panel said, so lower-basin shortage decisions set to be announced federally will directly affect local deliveries and service planning. To bridge the expected shortfalls, the town is pursuing exchange agreements with larger neighboring agencies to recover the town’s banked groundwater credits and said the credits could substantially delay shortages for existing customers.

Town utilities director Sean (introduced at the meeting as the utilities director who has worked with Peoria) explained the exchanges in practical terms: the town has previously injected excess CAP water into recharge projects and holds long-term storage credits; partner cities such as Peoria and Surprise would withdraw groundwater on the town’s behalf and leave the town’s CAP M&I water in the canal for treatment and delivery to Cave Creek. Brad Hill, a hydrologist advising the town, described those agreements as a “bridge solution” that mitigates the immediate 20% planning scenario and said the town has stored credits that could stretch a 20% cut for multiple years. “We’ve been putting water in underground as a checkbook — don’t spend it yet,” Hill said.

Officials emphasized the exchanges require multiple approvals: the partner city or cities must approve withdrawal, the town council must approve the local agreement, and CAP must sign off because its canal and priority framework are involved. Staff said a proposed exchange agreement with Peoria was before the partner city and would be on Cave Creek’s council agenda soon.

Local supply constraints make the strategy complex. The town has limited groundwater capacity in the shallow Cave Creek/Carefree aquifer and delivered just under 2,000 acre-feet of treated CAP water to customers last year; some Desert Hills wells have been declining. Staff said well rehabilitation could yield roughly 200 acre-feet per year as an interim supplement. The town also retains contractual obligations from past subdivision approvals (certificates of assured water supply) and an effluent delivery contract with a local golf course through 2049, both of which affect how water can be allocated.

Conservation and technology are a central piece of the plan. The utility upgraded meters and now receives hourly data for approximately 60% of customers; the town is launching a data-driven conservation program with a consultant to focus outreach on high-use accounts. Staff described a volunteer-facing program (nicknamed “Cactus Charlie”) and said more customers will be invited to use My360 to monitor hourly consumption and set alerts.

Staff presented alternative long-term projects under study but cautioned about cost and feasibility. Participation in the Bartlett Dam storage project would diversify supplies but is expensive: current estimates cited to the town placed a rough capital cost in the millions for the limited storage the town could access and indicated only a fraction of that storage would be deliverable annually. A separate proposal to secure groundwater from the Harkah (transcript: “Harkah”) Valley was rejected in January 2026 after due diligence flagged uncertain infrastructure and treatment costs.

Town leaders said they are also evaluating whether a sale or consolidation of the water system could improve access to resources or capital, and announced an upcoming invitation for bids to allow market proposals for the town’s utility systems. Staff clarified these solicitations are exploratory; the town is not required to accept any bid.

On public concerns about subsidence and environmental impacts from recovering banked credits, CAP and town staff said ongoing studies will evaluate potential physical impacts, well siting and mitigation. CAP representatives said statewide monitoring exists and that CAP is initiating studies focused on large-scale recovery operations.

The forum closed with staff urging continued conservation and promising frequent updates as federal CAP shortage declarations and partner-city exchange approvals move forward. Next procedural steps identified by staff: council review of exchange agreements, possible agenda items requiring confidentiality for negotiation, and a continued public outreach schedule.