Peoria council approves water-exchange agreement with Cave Creek to help neighboring town through CAP cuts

Peoria City Council approved an intergovernmental water-exchange agreement with the town of Cave Creek on June 16, 2026, authorizing the recovery of Cave Creek's long-term storage credits at a Peoria underground facility in exchange for delivering some of Peoria's Central Arizona Project water to Cave Creek.

The exchange, presented by Director of Water Services David Burks and water resources advisor Melinda Whittington, allows Cave Creek to recover groundwater credits it previously stored in wells inside Peoria and deliver that recovered water into Peoria's distribution system. In return, Peoria will schedule and deliver CAP water to Cave Creek at the CAP diversion point to meet Cave Creek's short-term demand while it develops additional local supplies.

"This agreement allows Cave Creek to utilize its own long-term storage credits while providing Peoria with additional recovered water, compensation for recovery costs, and protections that ensure our community's water needs remain the top priority," David Burks said.

Whittington walked council through the terms and numbers: Peoria would receive about 495 acre-feet of recovered water under the written agreement; the maximum amount of CAP water Cave Creek could receive is 450 acre-feet. The draft agreement treats one acre-foot of CAP water as equivalent to approximately 1.1 acre-feet of recovered water for accounting purposes. A recovery fee begins at $460 per acre-foot of recovered water, with a 3% annual escalator in the period from 2027 through 2033. Peoria staff told council the city may suspend deliveries under the agreement if its available CAP allocation falls to about 25,000 acre-feet or less, effectively limiting Peoria's obligation when local supplies are constrained.

A council member praised the proposal as an example of interlocal cooperation: "This is truly great local government at work helping a neighboring city because ultimately we're all going to need each other at some point," the council member said.

Councilors asked whether Peoria had used similar exchanges before; staff cited an existing template agreement with the city of Tucson and said Peoria has stored and can recover credits in other places when needed. City staff recommended approval on the grounds that the swap preserves Peoria's supply priority while providing a regional tool to manage shortages.

Council moved and seconded approval of item 19R; the motion passed on a voice vote recorded as 7-0.

The agreement sets a short-term, conditional bridge for Cave Creek while preserving Peoria's ability to prioritize its own water needs. The council approved the measure and directed staff to finalize the intergovernmental agreement and return it for execution.