Cave Creek council approves water-exchange deal with Peoria to access stored CAP credits

The Cave Creek Town Council voted 7-0 to adopt Resolution 2026-12 approving an intergovernmental agreement with the city of Peoria to exchange water storage credits and provide physical access to the town's long-term Central Arizona Project (CAP) credits.

Town staff told the council the agreement is a bridge solution as cuts to Colorado River supplies approach. "We're expecting cuts to the Colorado River. They're coming," the town manager said, urging the council to approve a mechanism that would let Peoria recover water from storage on Cave Creek's behalf and deliver CAP water to the town.

Why it matters: Cave Creek has been recharging unused CAP allocations since 2021 and expects about 3,200 acre-feet of long-term stored credits by the end of the year. The town lacks nearby recovery wells capable of withdrawing that stored water; under the exchange, Cave Creek would transfer storage credits to Peoria, which would use its recovery wells near the Beardsley Water Reclamation Facility to withdraw water and provide CAP deliveries or arrange treatment and diversion through partner systems.

How the exchange works: Peoria agreed to exchange up to 450 acre-feet per year. The town's staff said the financial terms give Peoria roughly 1.1 storage credits for every 1 acre-foot of CAP water it provides back to Cave Creek; staff also outlined a recovery fee that incorporates well-operation and delivery costs (staff cited an illustrative first-year per-acre-foot recovery fee of about $460, explaining the fee is not a pure purchase price for CAP water but part of a bundled cost and that CAP delivery fees remain part of the overall calculation).

Permits and timing: Staff said the agreement follows more than two years of interagency work, more than five permits and modeling by the Arizona Department of Water Resources (ADWR) to confirm recovery feasibility near Peoria's wells. The agreement must be signed by both local governments and accepted by the Central Arizona Project before it becomes operational; staff described those as remaining administrative steps.

Limits and contingencies: The council was told the agreement is not a guaranteed multi-year supply; if future Colorado River cuts deepen, Peoria may be unable to provide the exchange. The agreement runs for seven years with renewal options and contains provisions protecting Peoria's customers if recovery would harm its system.

Budget and next steps: Staff said the town will track potential use of the agreement, and if called upon to purchase recovered water it will incorporate costs into the town budget. Councilmembers asked follow-up questions about aquifer migration, the location of stored credits (roughly two-thirds at the Hieroglyphic facility and one-third at Agua Fria) and the role of the Arizona Water Banking Authority and CAP in broader statewide arrangements.

The vote: After questions and discussion the council adopted Resolution 2026-12 by a voice vote, 7-0. Staff said the agreement is intended as a bridge while longer-term state and regional mechanisms are finalized.

The next procedural step is final signatures and CAP acceptance; staff said they will return with any administrative updates or budget implications should the town need to call on the exchange.