In a proactive move to address ongoing Colorado River shortages and Central Arizona Project (CAP) reductions, the City of Peoria and the Town of Cave Creek have entered into an Intergovernmental Agreement (IGA) to strengthen regional water resiliency. 

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The mutually beneficial agreement, approved by the Peoria City Council Tuesday, provides Cave Creek with an immediate short-term water supply while ensuring Peoria has access to recovered water resources that don’t negatively impact Peoria’s groundwater supplies.

As municipal neighbors look for collaborative ways to navigate tightening water supplies, this agreement serves as a prime example of regional cooperation. The initiative is similar to the successful 2023 water exchange agreement established between Peoria and the City of Tucson, showcasing how Arizona municipalities are working together to bridge supply gaps.

Under the IGA, the City of Peoria will exchange a portion of its available CAP water for Cave Creek’s recovered long-term storage credits. The agreement allows Cave Creek to fortify its supply during critical periods when CAP contract reductions occur, ensuring the town can consistently meet customer demand. 

The exchange supports Peoria’s Assured Water Supply designation and proven 100-year of delivery based on a diversified water portfolio which consists of CAP water, SRP water, effluent, groundwater and long-term storage credits. 

Key Terms of the Agreement:

  • The Exchange Ratio: For every 1 acre-foot of CAP water delivered by Peoria, Cave Creek will exchange 1.1 acre-feet of recovered long term storage credits.
  • Financial Terms: Cave Creek will pay a Water Recovery Fee to support Peoria’s well operations, maintenance, and replacement budget. This fee starts at $460.00 per acre-foot and includes a 3% annual escalator.
  • Volume Cap: The exchange volume is strictly capped at 450 acre-feet of CAP water delivered to Cave Creek per year during declared shortages and 25,000 AF of CAP water is available to Peoria for delivery. 
  • Timeline: The agreement is a temporary bridge running through the end of 2033, allowing Cave Creek the necessary time to bring its own permanent, augmented water supplies online.

The Cave Creek Town Council will consider the agreement at their June 23 meeting.