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Peoria approves water exchange deal with Cave Creek

Bright blue water in a concrete canal with bridge in the background
Alex Hager
/
KJZZ
Colorado River water flows through the Central Arizona Project canal in Phoenix on March 27, 2026.

Looking to shore up its water supply as Colorado River cuts loom, Cave Creek is finalizing a water agreement with Peoria.

Cave Creek gets nearly all of its water from the Colorado River through the Central Arizona Project canal system.

The town has also paid to store water in a West Valley aquifer the town doesn’t have direct access to. So Cave Creek is letting Peoria use some of its stored water in exchange for some of Peoria’s CAP water.

The Peoria City Council signed off on the deal on Tuesday, and the Cave Creek Town Council will vote on the agreement on June 23.

“It gives us a lot of security for the next few years in order for us to evaluate and find the next long-term water resources for the town. You know, having these in place is a huge thing, and we've been working on it as staff and our consultant team for over two years now to get to this point,” Cave Creek Utilities Director Shawn Kreuzwiesner said.

Kreuzwiesner said Cave Creek is looking to finalize a similar intergovernmental agreement with Surprise, which is modeled after the Peoria one. He expects these IGAs will become more common.

“A lot of municipalities and other water companies, they can't recharge or they've got their storage credits in other facilities where they don't have direct access to. So, I think we're going to see more and more of these as they move forward,” he said. “We're just so happy and grateful that Peoria was willing to work with us.”

Peoria Water Services Director David Burks said the Cave Creek agreement was in turn modeled on an agreement Peoria has with Tucson. In that case, Peoria is the municipality storing long-term water credits.

Cave Creek, Arizona.
Alex Hager
/
KJZZ
Cave Creek, Arizona.

Cave Creek gets a much larger percentage of its water from the Colorado River than Peoria does, roughly 95% compared to 60%, because Peoria has a diverse portfolio of water from multiple sources.

“The sole intent for this agreement is to help Cave Creek bridge their gap in order to get wells drilled and online. It's not a guarantee they're going to need the water from us, but we will be a source for them, if needed, based on the amount of cuts,” Burks said.

The two recharge facilities where Cave Creek has stored water are Agua Fria and Hieroglyphic, located in Peoria and Surprise, respectively.

The IGA between Cave Creek and Peoria will only last until 2033, and if the state takes severe water cuts, Peoria can opt out of the IGA.

“We feel if one city has a problem, we all have a problem. So, we feel like we're going to tackle it together and help who needs help to the best that we can,” Burks said.

The IGA does expand Peoria’s groundwater portfolio, which is a commodity.

“Groundwater is not really considered a renewable source,” Burks said. “So, we hold tight to our groundwater. The surface water is renewable, and so the value is stronger with the groundwater versus the surface water.”

The exchange is capped at 450 acre-feet of CAP water delivered to Cave Creek per year. One acre-foot is enough to serve about three single-family homes for a year.

The IGA is in addition to work Cave Creek is finishing up to connect its infrastructure to Phoenix’s distribution system. The two municipalities have an existing agreement to deliver water resources to Cave Creek, which will be made possible by the new connection site.

Also, Cave Creek is investing in raising the Bartlett Dam, which Kreuzwiesner said could result in the town getting new water from the Salt River Project.

The Phoenix connection, dam improvement and IGA all cost money, but Kreuzwiesner said it shouldn’t raise water rates significantly as this is something the town has already been budgeting for.

“We consider this a bridge solution for us. It's allowing us to bridge to a long-term water solution — new long-term water solutions. Again, it's a finite amount of water because it's basically the water that we've recharged and put into the ground and created a checking account for the town. Now we're withdrawing from that checking account,” Kreuzwiesner said.

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Camryn Sanchez is a senior field correspondent at KJZZ covering everything to do with Arizona politics.