Cave Creek approves $18.5M Phoenix water interconnect, formalizes annual grants program
CAVE CREEK, ARIZONA — December 19, 2023

Cave Creek approves $18.5M Phoenix water interconnect, formalizes annual grants program

Town council approved critical $18.5M Phoenix water interconnect project to address system reliability issues, formalized community grants process, and terminated problematic continental estates development agreement while addressing town core pedestrian safety and responding to county rezone concerns affecting neighborhood residents.

Cave Creek Commits to $18.5M Phoenix Water Interconnect Amid Neighborhood Battle Over County Rezone and Grants Policy Overhaul

On December 18, 2023, the Town Council of Cave Creek, Arizona locked in funding and contracts for a transformative but expensive water infrastructure project, formalized an annual community grants program after heated initial debate, and directed staff to respond to Maricopa County rezone requests that residents fear will industrialize a neighborhood gateway. The meeting spanned infrastructure resilience, fiscal policy, and land-use defense.

Key Speeches

"The town operates a water system that relies almost exclusively on one 16-inch pipeline that pumps water over 12 miles from the CAP canal through a series of four inline booster pump stations which were involved to our single water treatment plant and that provides over 95% of our water... anything that goes wrong with the pipeline, one of the booster pump stations or even our water treatment plant can restrict our ability to provide water to our customers." — Sean Corfman, Town Manager

"We came to the town in '87 and begged you to annex us and you did you brought us into Cave Creek and we've always felt like we were as integral a part of this town as anyone else... the citizens of Sara West who fully believe we are an integral part of the town of Cave Creek... we need your help. We're asking, am I supposed to hand this to... everybody? Okay, so we're asking Carol we'll have to wrap—we only have three minutes but we're just asking you to please respond—please tell me you'll respond to the county in this letter." — Carol Perry, Sara West resident

"It makes sense to actually tie into the CAP pipeline and bring those pipings so the pipings configured to bring onto the site. This extra scope of work is to allow Black and Beach to complete the rest of the design components and the integration with the water treatment plant. These the physical construction of this is already included in the cost model that MGC has already given us—the $18.5 million includes adding the new small reservoirs." — Sean Corfman, explaining CAP 4 booster station integration

"I would like to see us—the town's in good financial shape and we need to stop being just a great big water company in a little tiny town. I would hope that in the budgeting process we up that $40,000 to something because I'm very reluctant to take it away from existing." — Councilmember Thomas McGuire, on grants funding

Timeline

Phoenix Interconnect Project

Community Grants Process Policy

Continental Mountain Estates Development Agreement Termination

Maricopa County Island Rezone

Other Notable Items

Opposition (Maricopa County Rezone)

Number of speakers against: 3 (Carol Perry, Michael Johnson, Julie Goldammer)

Main concerns:

  1. Rezone overlay language permits billboards with reduced setback — from 150 feet (standard C2 commercial residential separation) to 39 feet, directly facing Sara West neighborhood at town gateway.
  2. Commercial uses not compatible with neighborhood preservation — propane/butane sales, wireless communication facilities, and other overlay provisions embed non-residential uses that cannot easily be revoked.
  3. Ongoing violations at nursery site — tractor trailers parking on 52nd Street (town-maintained); product sales outside fence; employee vehicle parking on street; activity undisclosed and not reported by town for years.
  4. Toy Barn concessions ignored for successor developer — the first developer (Toy Barn) negotiated an overlay with height limits (25 feet), landscaping buffers, traffic restrictions, and color restrictions. Nursery developer changed its rezoning request after Toy Barn was approved, seeking more expansive uses.
  5. Scenic corridor designation disregarded — Phoenix designated Cave Creek Road a Scenic Corridor in 1986; county rezone ignores that regional land-use context and resident quality-of-life expectations.
  6. Timing pressure and lack of prior town response — Planning and Zoning Commission hearing January 11 for nursery; Board of Supervisors January 24 for Toy Barn. As of Friday before the December 18 meeting, no Cave Creek staff response had been submitted. Residents drafted a letter requesting formal town input.
  7. Equity and precedent concerns — if the nursery's overlay is approved, future commercial developers will cite it as justification for similar encroachments on residential setbacks and use restrictions.

Most compelling arguments:

Organized groups: None formally named; residents self-identified as Sara West neighborhood cohort and invited broader community support.

Number of speakers in favor: None during public comment. Council support was near-universal.

Key arguments:

  1. System reliability and habitability — Sean Corfman's articulation that the current system's reliance on a single 12-mile pipeline creates multiple single points of failure. Robert Morris stated: "when you don't have any water you don't have life."
  2. Fiscal sustainability — Robert Morris noted the town's general fund health allows for cash-flow smoothing and that water rate studies on a 5-year cycle make the project affordable. Construction costs are estimated to break even or better within the rate-study horizon.
  3. Historical necessity and scale — Tom Augherton and Robert Morris both referenced decades of investment in the water system (including prior treatment plant and booster station rebuilds in 2008–2010 era). Robert Morris stated: "I'm personally invested in this site [for] 10 years. This is one of the primary reasons I'm sitting on this council."
  4. Concurrent Phoenix infrastructure — The City of Phoenix is already purchasing long-lead equipment and beginning 16-inch pipeline installation by March/April 2024 on Cave Creek Road, motivating the town to lock in its contracts to stay synchronized.
  5. Safety and operational efficiency — Adding the CAP 4 booster upgrade to the scope improves worker safety (existing vaults do not meet current safety regulations for harness tie-off) and improves water treatment plant efficiency by better matching flow to Paul membrane units.

Organized groups: None; support was council-driven and staff-informed.

Project Details

Phoenix Water Interconnect Project

Continental Mountain Estates Development Agreement Termination

Maricopa County Island Rezone (Cactus Nursery & Toy Barn)

Vote Breakdown

Phoenix Interconnect Long-Lead Equipment (GMP #1)

Black and Beach Construction Services Amendment

Community Grants Process Policy (Initial Vote)

Community Grants Process Policy (Motion to Reconsider & Amended Version)

Continental Mountain Estates Development Agreement Termination

Annual Comprehensive Financial Report (FY 2023) Acceptance

Consent Agenda (Meeting cancellations, minutes approval)

FY 2024-2025 Budget Calendar Approval

Outcome & Next Steps

Phoenix Interconnect:

Community Grants Program:

Continental Mountain Estates:

Maricopa County Rezone:

Town Core Pedestrian Safety:

Protected Bike Lanes:

Controversies & Context

Maricopa County Rezone and Neighborhood Preservation

The Sara West residents' testimony revealed a multi-layered concern about land-use precedent and cumulative encroachment. The nursery's request to reduce billboard setbacks from 150 feet to 39 feet—making commercial signage visible directly from the neighborhood—was cast not as a minor variance but as a wedge that would embed commercial-use permissions in an overlay, making future de-escalation politically and legally difficult. Julie Goldammer's phrase—"once it's on the overlay it's on the overlay"—reflected a sophisticated understanding of zoning mechanics: overlays are difficult to amend retroactively without formal rezone proceedings that require supermajority or unanimous consent in many jurisdictions.

The residents also invoked equity: the Toy Barn developer, to its credit, had negotiated extensive restrictions (25-foot height, landscaping, traffic control, color specifications), yet the nursery applicant came later and sought to bypass those precedents by seeking broader commercial zoning. Michael Johnson's analogy to "bad policy" at American Express was apposite: once a lenient overlay is in place, every subsequent applicant will cite it.

Phoenix's submission of a 2-page response to Maricopa County (designating the area a Scenic Corridor and outlining how it would zone the property if it were within Phoenix limits) appeared to shame Cave Creek into action. Residents explicitly asked the mayor to respond to the county by the January deadlines, framing it as a civic duty to nearby municipalities that the county Planning and Zoning Board was asking for input.

Robert Morris and staff committed to staff follow-up, but offered no guarantee of a formal town letter before the January 11 and 24 deadlines. This left some ambiguity: was the town directing staff to craft a response, or merely to gather information? Resident Julie Goldammer's request to "the mayor or one or any of you" to "send this letter on our behalf" went unanswered in kind, with Robert Morris noting state law (Open Meetings Law) prevented him from responding to public comment in real time—a procedurally correct but politically tone-deaf response that left residents uncertain whether the council would actually intervene.

Water System Resilience and Fiscal Risk

The Phoenix interconnect project is the town's largest capital commitment since the 2008–2010 water system rebuild following the town's 2005 acquisition of the prior private utility. At $18.5 million construction cost, it dwarfs other recent projects and requires bridging via general fund loans. The project rests on the premise that the current system is unreliable: a 12-mile pipeline, four booster stations, and a single water treatment plant are single points of failure. A rupture, pump failure, or treatment plant outage could render the town without potable water in 24 hours.

Sean Corfman's testimony about the difficulty of working on booster station vaults revealed an operational crisis: two of the four stations are in public rights-of-way, inside vaults, with no ability to harness tie-off workers for safety. Any maintenance requires a multi-day system shut-down, which the utility can rarely afford. This operational brittleness—repair difficulty compounded by operational risk—justified the CAP 4 booster replacement and the broader interconnect.

However, David Phelps raised a legitimate fiscal concern: does the town have a pattern of non-repayment of inter-governmental loans? Phelps cited the sewer system and water system as historical cases. Sean Corfman's response was confident ("we know where the money's going") and based on recent improvements in accounting, but the historical record was not refuted—only the future intention asserted. Robert Morris framing of the loan as a smoothing mechanism repaid within the 5-year rate-study cycle ("break even or a little bit more than five years") implied a conservative assumption, but also acknowledged the town was betting on sustained rate revenues.

Museum Funding and Equity in Grants

The initial grants policy vote (5-2) exposed a real tension: Councilmembers Bunch and McGuire (joined by at least one other no voter) objected to a $10,000 annual cap because it would cut the museum's funding in half, from the historical $20,000. The museum had received $20,000 in FY 2023 (May/June 2023, the prior fiscal year), and the $40,000 line item was not yet allocated.

Darlene Southern's testimony was both defensive and pointed. She noted the museum receives more social media followers than any other nonprofit in Cave Creek, brings 7,500+ visitors from 46 states and 10+ countries, and effectively markets the town. She also objected to the policy's eligibility language, which included non-Cave Creek organizations in the "Desert Foothills" service area (a region stretching from Dewey/Humboldt to Mesa), arguing it diluted the town's ability to fund local nonprofits if 23+ organizations could apply.

The motion to reconsider, initiated by Tom Augherton (who had voted yes on the initial motion), swiftly removed both the per-grant and total-budget caps. This reversed course on the Kathryn Royer stated intent to formalize the process and reduce ad hoc council votes. However, Kathryn Royer and council acknowledged that budget process amendments would allow annual fine-tuning and that the committee-based scoring would still provide objectivity.

Cynthia Driskell measured support (Foothills Caring Corps) and Darlene Southern's critique highlighted a real question: should annual grants be driven by council discretion (post-reconsideration direction) or by a formal, criteria-based committee process (Kathryn Royer original intent)? The council chose discretion with a committee advisory layer—a compromise that preserved flexibility but somewhat undercut the formalization goal.

State Preemption and Open Meetings Law

Robert Morris response to Julie Goldammer's request that he respond to the county rezone was textbook procedural: "at call to the public we can't respond to you or anybody else on this—you're shocked but that's the state law." Arizona's Open Meetings Law (A.R.S. § 38-431.01) generally prohibits council members from deliberating or responding to public comment in real time; the proper process is to take comment, defer, and return with a formal decision after proper meeting protocols.

Yet the rule had a chilling effect on resident confidence. Residents had drafted a letter and asked the council to send it or draft one. The council directed staff to "look into this" and follow up "expeditiously," but offered no assurance it would meet the January 11 and 24 deadlines, nor did it commit to a formal letter. The residents left unclear whether the town viewed the rezone as a threat worth fighting.

Duration

Other Notable Items

Annual Comprehensive Financial Report (FY 2023): Baker Tilly auditor Brian Hemley issued an unmodified (clean) opinion on the town's financials. No material weaknesses, significant deficiencies, or fraud identified. General fund and proprietary funds increasing year-over-year; Desert Hills Water fund remains a persistent challenge with negative unrestricted position of $1.086M and annual borrowings of $241,200 from other funds. Rate study effective January 2023 expected to resolve shortfall over 5-year period. Vote: 7-0 acceptance.

Year in Review (2023): Town Manager Carrie Dyson presented highlights: 25th consecutive certificate of achievement for financial reporting (GFOA); FY 2024 distinguished budget presentation award; community partnerships (Spur Cross Conservation Area ribbon cutting April 11; Foothills Food Bank groundbreaking October 5; local landmarks program recognizing seven new entities); Cave Creek Rodeo Arena restroom renovation and hospitality building rehab; damaged welcome sign replaced; water treatment plant flow meter upgrades; EMS Trail ATV delivery (June 1) from Firehouse Subs Public Safety Foundation Grant ($28,749); Fire Station remodel contract approved (completion end of 2024).

Town Core Plan: Planning Commission to hold public hearing Thursday, December 21, 2023, at 6 p.m. to make recommendation to council. Bike lanes included in plan but no protected bike lane enhancements currently planned. Public commenter Cory Setter requested study/survey for protected bike lanes but received no commitment of action.