Cave Creek council approves seven-year Peoria exchange to access stored water as Colorado River cuts loom

The Cave Creek Town Council on June 27 adopted Resolution 2026-12 approving an intergovernmental agreement with the City of Peoria to exchange water storage credits so the town can access physically recoverable water if Colorado River allocations are cut.

Town staff said the agreement is a near-term "bridge" to provide drinking water reliability while longer-term strategies are worked out. The IGA allows Peoria to recover water from its wells on behalf of Cave Creek, in exchange for the town's storage credits and a recovery fee that covers Peoria's operational costs. Council moved the resolution and it passed in the recorded vote.

Why it matters: Cave Creek expects reductions in Colorado River deliveries and has been recharging unused Central Arizona Project (CAP) allocations into underground storage for several years. Staff told the council the town anticipates having about 3,200 acre-feet of long-term storage credits by year-end and needs a partner that can physically withdraw that water.

How the exchange works: Town staff said the draft agreement allows Peoria to exchange up to 450 acre-feet per year on Cave Creek's behalf. For each acre-foot Peoria recovers, the town would provide roughly 1.1 acre-feet of storage credit (a common exchange ratio), and Peoria will charge a recovery fee intended to cover well operation and delivery costs. Staff cited an illustrative first-year recovery fee in the documentation of roughly $460 per acre-foot but said CAP delivery costs are handled separately as part of the overall arrangement.

Staff and agency role: Staff described more than two years of interagency work, multiple permits, and coordination with the governor's office, the Arizona Department of Water Resources and the Central Arizona Project. The plan uses Peoria's Beersley Road water reclamation facility and nearby wells to meet the one-mile recovery rule that applies to recharge recovery.

Council comments and assurances: Councilmember Tom and others pressed staff on modeling of groundwater migration, the town's banked volumes, and whether the Arizona Water Banking Authority (AWBA) can guarantee credits. Town staff said AWBA holds substantial historical stores but that distribution mechanisms are still being worked out, so the exchange with Peoria is a concrete near-term tool that must still clear CAP and other administrative approvals.

Next steps: The agreement requires signature by both municipalities and approval by the CAP board before recovery could begin. The town characterized the IGA as a renewable, seven-year arrangement that provides access to stored water while staff pursues additional agreements and longer-term options.

Quote: "Reductions are coming to the Colorado River," the presenting staff member said, arguing the exchange gives the town a safety net "to ensure reliable water services for our customers."