Cave Creek unanimously approves $114,000 water system sale study contract amid CAP cuts

Welcome to the special town council meeting. Uh the meeting is now uh called to order for the town of Cape Creek, Arizona, March 24th of 2026. if you'll rise uh and join me in the pledge of allegiance please. I aliance to the flag of the United States of America to the republic for its one nation, indivisible with liberty and justice for all. Thank you.

We have one item on the agenda tonight and it is the council discussion of possible approval of expanding the scope of the invitation for bid on the possible sale of Desert Hills Water System to include the Desert Hills Water System, Cave Creek Water System, and Cave Creek Wastewater System and authorize the town manager to amend the professional services agreement with Rafelis to assist with the invitation for bid in an amount not to exceed $114,000.

With that, I'll turn it over to our town manager. Thank you, mayor. Um, I'm going to go through a um PowerPoint presentation and a lot of the information I'm going to share um the council's very much familiar with, but it helps explain to the public how we got to this point tonight um on this particular agenda item. With that, I'll go ahead and uh go forward.

By the way, I have um if questions arise um tonight or following the presentation, I have our utilities director, um finance director, um our attorney is also here, and myself to answer any questions that um the council may have. With that, I'll go ahead and proceed. Um as the the council's aware, the United States and the western um region has been experiencing over 30 years of unprecedented um drought.

This has caused uh reduced uh water volume of the Colorado River which in turn has caused water levels at dams, reservoirs and power production facilities to decline. Um this has caused concern um about potential damage to infrastructure um and uh costing uh you know billions of dollars of investment.

um upper and lower basin states have failed to reach an agreement on sharing the reductions of Colorado River water and the Bureau of Reclamation has stepped in and will be making a determination on resolving the Colorado River situation.

right now all indications uh appears to be perhaps a more of a bias for um the upper basin uh states um and with uh the state of Arizona being a a junior um uh signer to the the 1922 compact um we're probably not going to be coming out very well as a result of this. Um, as a result, the state of Arizona anticipates that there will be significant water reductions um that we can uh sustain from the Colorado River.

Um, already because of anticipated cuts um this year, Cave Creek lost delivery of 386 acre feet of cap NIA water. Um, in the past, we were able to store this water and get some credits um that we anticipate using in the future. In addition to anticipated cap reductions, the utilities master plan has identified the need for an additional 1,800 acre feet of water resources.

This is for those um that hold parcels that have long-term commitments and certificated areas that allow for um and also for those individual lots that have prior rights for individual connections. Um, last November, the council authorized staff to initiate an invitation for bid on the possible sale of the Desert Hills Water System based on the anticipated cap water delivery cuts.

Um, an advantage potentially of selling the Desert Hills water system is that it would allow the town to retain approximately 550 acre feet of cap water, which having gone through a recent um consideration of purchasing uh outside water resources, that translates into about $1 million uh in savings. Um, after initiating the Desert Hills invitation for bid, the town learned that a cut ranging from 20 to 57% of cap water will be taking place in starting January of next year.

Staff is seeking town council direction to amend the scope of Desert Hills invitation for bid to include Desert Hills plus consideration of Cave Creek water system and Cave Creek wastewater system. Staff is also recommending that the firm Rafelis assist the town in preparing the bid documents, performing appraisals of utility assets, analyzing the bids received, presenting the findings, and issuing recommendations to council.

Rafelis is the firm that assisted the town with the um invitation for bid for for um Desert Hills. And we would be wanting to continue with them. they they did all that um was asked of them and we have a very high confidence level that they could perform this um this project.

Um so Refellis will also evaluate and perform the financial analysis of a possible alternative which is an IG with another municipality that would provide bulk treated water and distributed to customers by the Cave Creek water system. So those are the two aspects that Rafelis will be assisting the town with.

Um the invitation for bid timetable um due the the lead time that it's going to take for staff and providing uh data and information to refus um who will be preparing and issuing the invitation for bid receiving the bids and analyzing the bids. It's anticipated that um this will come back to council for its consideration um a report with its analysis and October September time frame.

Uh staff will continue working on some of the other bridge water solutions that um we have been um identifying to help us get through these um years uh starting next year with water reductions um like ways of accessing our water storage credits, also reactivating our wells and also enhancing water conservation efforts.

Tonight, the actions uh being asked of the council is one to expand the invitation for bid scope to include the possible sale of Desert Hills, Cave Creek Water, and Cave Creek Wastewater and authorize the town manager to amend the professional services agreement with Ref Telus to coordinate the imitation for bid process by an additional amount not to exceed 114,000. With that, um, I'd be happy to answer any questions of the council or staff would be as well. Questions for council.

Okay, I'll start. So, tonight, Grady, uh, we're here to approve an IFB, nothing more. I'm wondering um when will the time come when we discuss the philosophical portions of buying uh selling our our water company and to a private entity. So the pros and cons sure of public versus private. Well, at this point what the invitation for bid is going to do is it's going to provide a lot of what I would call the analytical work.

Um, but to your point about the philosophical part of perhaps the community, I think there's going to be a a important component where the council will want to hear from the public. Um, and that will be after the council's had a chance to look at figures and numbers. Um, and there will be definitely some uh forums for the public to participate.

So while I showed you August, September would be the date that the council will see the the figures and I believe that will be because of the sensitivity of the data that will likely be in executive sessions. Um but once it is available to you know for the public consumption that will definitely be public and they will be made aware of all the information that the council would have seen in an executive session at a later date and that will also be before we make a final decision. Absolutely.

My second question is what steps are we taking to protect our employees? Well, that is first and foremost something that both Sean and and the deputy director and I are really keen on. We're very concerned about u perceptions or concerns from employees. First of all, this is not a done deal. We don't know what the numbers are going to come back like.

Um, but no matter what, we want to protect our employees and give them reassurances that um that they'll have uh their considerations taken into account for the possible sale.

So, as an example, um if it appears that the council is um moving in the direction of once they see the figures and they want to consider uh selling and want to engage in um contract, we definitely want to have something in the contract that um uh provides assurance to the employees of their jobs and that there is a transition period that they would be with the new company um and that there's some protections for them that Okay.

And by the way, um something like this would probably take more than a couple years to actually from the time that this comes through and there's some regulatory hurdles and things like that that would have to go through. And then typically um there would also be a transition period um even if a company um is successful for that transition before it gets fully cut over and turned over to the company.

So employees would still be definitely on, you know, our payroll and still working for us um before they would potentially be working for the new company. So it could be two, three years before that even be a reality. Good. That's good to hear. And I hope our employees hear it as well. Yes. And we're also planning, Sean and I are also wanting to after tonight meet with our employees um and and just provide some information.

and um they're obviously concerned and I I don't blame them um for you know what the rumors are and not knowing what's happening. So absolutely. Is it true that we've already had one person leave because of these rumors? Uh definitely I can I can confirm one for sure has um and it's you know um on top of mind of employees right now. Thanks Grady. I'll try to phrase this as a question but questions are are appropriate.

As a person who has been here when the water company was owned by Jay George, transitioned to global water, transitioned to Cave Creek Water, uh would you confirm that it was recognized that our employees had a unique perspective? They understood the water system and this was extremely valuable information for anyone who would be buying the buying the water company. That's a really good point.

In fact, I my understanding is that the town inherited a number of the employees um as part of that transition and then eventually they were on on our payroll. So, um yes, good good point. Thank you, Mayor. And Grady, could you comment on the timing of when the Cave Creek Wells would be operational as it relates to when CAP cuts may come into effect? Yes. Um I may have the utilities director chime in. Um, but he's been currently working on trying to get them reactivated.

Um, he's done some hydraological uh testing and um I'll I'll refer that to Mr. Cruz Weisner, Mayor Council. Um, yeah, we're our goal is to try and get uh of the three walls that we've tested, at least two of them up and are operational by the end of this calendar year. Uh, with the third leader, we actually have a fourth well which actually had very high arsenic that we're trying to avoid having to equip because of high arsenic levels.

But yeah, our goal is to have uh some of the old wells actually online by the end of this calendar year to allow us to move forward into next year with the pending cuts. How many do you think? He's asking. Yeah. Yeah. The three walls we're talking about we we believe can get us close to 400 gallons per minute of flow. Um acre feet. I think that's uh um over two to 300 acre feet of water out of the groundwater table.

The problem we're going to have is that um when the Cave Creek water system was started in the 50s, they they developed on groundwater wells, but they quickly realized that they weren't sustainable, that they were drawn down quickly. That's why there was a conversion over to this what was considered a more reliable water supply, the CAP water supply. Uh was done by 1990.

Uh so now reh bringing these wells back online, we might run into an issue that again, we don't have a very thick aquifer where Cape Creek is. So we might draw that down. We have to be cautious of that. So we think we can get a few years which will help us out. Thank you. Other other questions from council. You had another one, Cynthia. I kind of have a followup to Cynthia's. So, if we were to use municipal wells, would it impact private wells of homeowners?

Bit of a loaded question because as a municipal well, we actually have a permit to run them at the capacity they're permitted at. Um, and then it's a matter of physical availability of that water. You may actually see some impacts to what are considered exempt wells in the area. Um, but you know, it's it's our goal would be to to try and get the the resources into the town to make sure our water customers have water supplies.

It there could be an impact to to other private wells close by to private wells close by. Yeah. So, that's primarily in the town core. Correct. The wells that we're trying to energize are more in the town core along Cave Creek Road. Um where um we actually there's an existing well line.

When the town uh private water company built the system when they actually converted it to the surface water treatment plant, they actually did a pipeline to connect all the wells together to bring it back to the treatment plant site as a backup supply. So we're trying to re engage that pipeline in effect. Okay. Thanks, John. Yeah. Other questions down here? Assuming that we take some cuts here, uh we might have to activate the drought management plan. When would that come into effect?

Mayor Council, so per the town's adopted 19 uh uh 2022 drought management plan, um I'm actually supposed to give you a number by October, um which would be our our projection of our supplies versus water resources for next year.

So, we believe by July is when the Bureau of Reclamation will issue their 24-month forecast, which usually kicks off how much water will be physically available for uh uh the Colorado River, all the users, and then falling to back to the CAP canal um uh for the next year. So, we'll know that midsummer, and then before October in the drought plan, I was supposed to be coming back and present to you as far as where we fall within our projections for available water resources to our demands.

And then that triggers whether we what drought stage we go up through from uh zero which is no issues hunky dory. We've been in a drought uh plan stage one which is water watch all the way up through water w uh uh uh stage four. Stage four is when we are projected um supplies are more than 20% short.

And then that that triggers a bunch of things that are actually in cauterized in code, town code, that allows town council to then start making decisions about what what the next steps would be to help uh um require uh reduce water uh use by customers, including requiring people to actually save water and um uh use less water and or even implementing new search charges outside of the rate study. That's actually all was put in place in town code in 2022 when we adopted that plan.

But it would be this fall that would be coming forward with you with that projection. I think October is when we set it in the plan. Thank you. Okay. Uh little public comment. Before we start that, I want to say that we're it's going to be three minutes and uh we have the light system up there. When the lights green, uh you're in your main part. When it turns yellow, you should be wrapping it up. When it's red, uh finish your sentence or paragraph and then we'll move on.

Um this is a time for comment uh questioning on staff. We have very limited things we can say. So, we're not going to entertain questions. If you have a question, you can ask it. If someone on council wants to pick that up, they can, but uh there's not a lot more that we can uh say on that to fill in some of these blanks. Um with that, who's our first one? David Smith. David Okay. David Smith, 4689 East Rocks Drive, Cave Creek.

Uh, around 2008 2009, the town reestablished the water advisory committee. At monthly meetings, I asked if the town had considered having an alternative water supply. Later the present mayor joined the committee which jointly endorsed having a alternative water supply at a minimum for emergency water to the town.

As time went on, the council where I was now a member directed the town manager and staff to approach the city of Phoenix with a proposal to establish an interconnect between Cave Creek and Phoenix water system. As this proposal moved forward, there was some discussion for future consideration of having Phoenix assume responsibility for supplying Cave Creek's water needs. This later consideration did not move forward.

However, funding was secured for the interconnect which is nearing completion near the intersection of Cave Creek Road and Carefree Highway. At the present time, it will be essentially a multi-million dollar insurance policy in case our water uh pipe down to the uh cap canal breaks. I have no idea if Phoenix has been approached with a proposal to fully utilize the interconnect to pro provide water to Cave Creek. However, I think it should have done so.

If not, the town a few years ago actually did seek interest from commercial entities to take over the Desert Hills Water Company when the loan potential bidder asked for hundreds of acre feet of water as uh entitlement and a pay a paid off loan and extra funds. The town stopped pursuing the idea.

The invitation to bid for Desert Hills should uh not include Oh, the the invitation the expanded invitation to bid if if it h if it happens uh should not include water should it consider the water plant operation cap access the carefree wheeling agreement the interconnect with Phoenix water system or any other infrastructure or relationships with other entities. If this approach is implemented, I hope that the public will have an opportunity to review the IFB. Thank you. Not bad.

Just sound a yellow. Good job, David. Bill Sullivan. Good evening, Mayor Council. William Sullivan, uh 6033 East Sello, Run North Dave Creek. I am your chairman of the utility advisory committee. I'm not here on their behalf. I'm here on my own behalf. Uh we have not had a chance to meet and discuss this. The last time we met, we had it on the agenda, but we didn't get any significant information to be able to do so because right now you were uh understandably uh keeping that information.

The bids had just been received and we weren't entitled to see them and that was fine. But what I'd like to say is instead of spending $114,000 on expanding this, I think this provides an opportunity for the council to find out what the pros and cons of moving forward are. you have whatever bids you have, put them up in the public, deal with those.

See if there is public sentiment favoring a sale of all or part of your systems and because you can get that with what you've already done and save the $114,000 for things that are needed in the system. Now, we've know that there are major rate increases both because of water supply and otherwise that are going to keep coming forward. Let's not spend any more than we have to. Thank you. Thank you, Bill Baur. My name is Bill Basor. I live at 2415 East Rockaway Hills Road, Cave Creek resident, Mr.

Mayor, vice mayor, council members, thank you so much for showing up to do the really hard work because this is this is tough. I have a a few thoughts that kind of concern me. When we discuss the 1,800 acre feet that we need to really fulfill the system, we're not talking that we need 1,800 acre feet next week. We are talking at buildout we need 1,800. Our most immediate problem is is the 20 to 55% cut. And that is a big enough problem right there. There is some good news here.

Number one, and we really have to thank many administrations that came before this one for getting us ahead of this game. The the very fact that, you know, we have the interconnect now means that we have the possibility of using a lot of different sources of water. Before the interconnect, we had no physical method to get SRP water to Cave Creek. With the interconnect, we will have that. We had no mechanism with the town of Phoenix for them to try and supplement what we're doing.

So we got ahead of the game there. And I think right now you are considerably ahead of the game looking at the value of the asset. I don't think in my opinion that a decision about whether to keep this or get rid of it yet is is necessary or called for. I think you need to understand your options. Many times we have seen in the past where Cave Creek maybe didn't make an optimal decision mostly because they didn't have all the data. They didn't do the analysis.

I I know that the mayor could itemize several of those things. This is part of the analysis. Now, as we talk about this contemplating selling this, it kind of feels like we're talking about uh you know, putting the kids up for adoption because we think we're about to get laid off. Okay. We're not at that point. There is water out there. There are sources. San Diego just got approved. If we want to pay for their desolinization, they will sell their rights for their share of the river water.

We may not like the prices of the water. I'm sure we won't, but it's not a crisis yet. I believe also that we have a 20% firming offer from CAP. I think it's unique to our town. And I don't think anybody else has that. And by firming, what I mean is they won't give us new water, but they would help supplant what we have from the cut back.

So I I'm just a little concerned that we get on a roll here where this seems intensely negative and terrifying and people panic and I don't want people to leave. We've invested a lot of money in the people in our water department. So let's just move forward but not jump to conclusions. Thank you. Thanks, Bill. Thank you. Two seconds. Almost as good as Mr. Smith. Bob Anderson. Hi, Bob Anderson, 4788 East Ellen Darl.

Um, first of all, my uh background in business was uh partially in mergers and acquisitions. And I take a look at the water company and I wouldn't buy it. Uh, this is a business that has no growth. It's saddled with debt. And if I want to make a 15% internal rate of return on this business, all I can do is buy it with the hope of increasing the prices far beyond where we are right now. And they be a terrible disservice to our people and our residents.

I think after we spent all the money um putting into Phoenix Interconnect to contemplate selling this business would be like uh remodeling your kitchen, spending a lot of money and then putting your house up for sale, you know. So, I don't really see the point. We haven't even benefited from, you know, this this fine investment with the interconnect. Um and we're jumping to conclusions and and jumping to the next step.

I think that we need to to calm this down a little bit and uh benefit a little bit from the projects that are undergoing right now as other people have said and just put this on pause for a little bit. Overall, I think the thing that we're looking at is not the water business, it's water. You know, we need to do something to get more water. I was doodling around with uh my bill. Say I take about 10,000 gallons every month.

If they doubled the raw water cost in my bill, it'd be about $30 a month, about 30%. That's not terrible. I think that gives us a lot of wiggle room to negotiate for maybe the San Diego solution. I don't know what else is out there. Um, but I think that we should spend some more time and energy investigating other sources of water because that's really the number one goal, you know, for what we're trying to to to do here.

Um, and finally, I think David mentioned, you know, Phoenix is a great resource and I think we need to explore more options with them. We have the Desert Hill system right now that could be a growth area for Phoenix with a chip plant coming in there. Phoenix could annex that. We could tie into the Toronto side and have a dual supply of water to the town. We have not even explored, to my knowledge, uh, a cooperative agreement where Phoenix would take over our whole system.

that might make more sense than trying to sell it. So, I think that there's some things that we need to do administratively before we we pull the plug on this thing and put it up for sale. So, I I don't think $114,000 is the right move at this point, but maybe something if it's going to result in exploring IGAs that can help us source the water that we need in the future. Thanks. Thanks, Bob. Bruce Arland. Thank you, Bruce Arland. Morning Star Road. Uh, thank you guys for looking at this.

Very very important. Uh, I just have a couple of things to say. Uh, I I did want to comment and say that I think our I wrote this down a second ago. our options. I think we really do know our options to tell you the truth. I think we're we know them very well and they're limited in terms of actual water. Very very limited. Not impossible, but limited. Um I would say that the conditions in Cave Creek for water is at a situation right now that um we don't have a lot of water.

We essentially don't have a lot of water. Um, we know, everybody knows Arizona and CAP, which we're tied to almost exclusively, is going to have massive cuts of up to here up to I know this sounds crazy 100% but around 77% cuts coming shortly. And the third thing I wanted to actually the yeah third thing we subsidize now out of our budget what is it about $6 million for the water companies right now. Not too sustainable.

And fourthly, Cave Creek does not have economy of scale to run the water companies. So what I say is go ahead. If you want to spend $114,000, go for it. you'll have a report.

But in certainly my heart, the people I've talked to, and I think some of you know now that if we get out of the water business, save ourselves from running something that we're not that good at, just economy of scale, we will free ourselves to a get water, have water for the residents or the businesses, save $6 million a year, and uh walk away with uh with some sort of uh freedom, I think. Thank you. Thanks, Gary.

David Phelps, mayor and council David Phelps, I think we're at that point with the um utilities department that we can't afford not to look at this. We can't afford not to spend the money. We can't afford not to explore what others could do for us given our situation. I think the optimism about having the backs stop at 20% still leaves us close to 30% shy, which leaves us below the critical line of being able to make up the water.

I think one of the things that I see is since we've had a lot of good information over the last year, the actual amount of measurable conservation we've been able to obtain, I don't think it's even been measured. I I don't think with the knowledge of the hundred or so accounts that use 50,000 gallons a month, I don't think we know today how many of those people now are trying to use 20,000 gallons or what the effect of that will be over the next year.

So I am very much in support of you guys keeping your hearts and minds open to our new reality which is we have tied our uh water wos to a a river system that is having you know a natural climate disaster effect on us. So thank you for your courage in looking at this and I hope you approve it. Thank you, Janet Moore, Mayor, Vice Mayor, Council. Um, I was here when we had to buy the water company. We had to do it to uh for our destiny of the town. We had to make sure that we didn't overgrow.

Um, so I don't And how did we get here? Like now we want to sell it. Everybody's all concerned. We We have to sell it. We don't we, you know, we we we don't have the money. We What happened here? Maybe we should take a look at our town and we should look at the potential of our revenue that we can have coming in from tax dollars. Maybe we can look at using the potential of our zoning like we have not been doing and um create money for that to pay for things.

I do not think we should sell the water company. Um I think we should turn it into a viable business. We own it now. We put a lot of money into it and we should not jump ship. I can't believe I can't even believe that we're talking about this. That's all. Thank you. I have no additional speakers. Okay. Um I'm going to make the motion.

I move that uh we authorize the town manager to amend the prof the professional services agreement with Raph Telus to assist with the invitation for bid an amount not to exceed $114,000. Second. Wire had the second. Um excuse me, mayor. Um it's a combination motion. Wasn't sure if you understood that. What's the other part? The first part is to expand the scope. Oh, and amen that and also an approval expanding the scope. Yes. That contract and and the invitation to bid.

Um a lot of really good comments on both sides tonight. Um the companies don't get the idea this is a snowball running downhill because it's not mun municipalities do not sell water systems. That's it's you the other way around. They don't usually buy them. So the anyone that has the idea that this is a done deal and just because we're out here doing these things, uh I personally am skeptical. I I know we can run a water system, I know we can do it well.

Um we've uh been working on that for a long time. We've got a ways to go. Um there's no danger of losing water on the first of year. We have at least what four or five different sources of water. We have the millions of acre feet in the Arizona water banking authority and we're working with CAP and with the water banking authority and the governor's office and the department of water resources and uh they all know that we will be there if we need it.

Uh we will be there and uh we had a meeting with CAP. They are the group that uh puts that together. So uh we also have our own stored water, two years of stored water. We have we're putting wells back in. We've got conservation and we there are numerous other projects we're working on at the same time uh to to supply the water if this happens. Um we're at peak uncertainty and uh uh this is an analytical exercise mainly. Rafelis is highly numbers oriented and strategy.

Uh and they're doing some the calculations that we frankly don't do often enough to be as good as they are at doing them. So it's it's once again this is not a snowball running downhill. Um we're just getting the numbers and we'll see. we we're going to do the best thing for the for the town. I mean, that's the same thing that uh uh we try to do every day and we're going to do it in this case. The town has made many many mistakes.

I every once I pull out my my top 10 list to go through them and they all have the same issue. Uh the consequences of of the actions were not adequately looked at and we are not going to make that mistake. uh we're going to look at this thing um from all sides and make sure that we are doing the right thing. The whole state is in the same situation and uh there's going to be a lot of water. We have people we have water sources coming at us from time to time uh for the long range.

We need long range water. We've got the short-term water to prevent uh um a huge problem uh January 1. Uh but we also need long-term water because of the obligations we have uh that are out there that we haven't uh that are that they've been around forever. Some of them are decades old that we have agreed to furnish water. So there's no need for any panic. Um we're going to make a rational decision.

Um, and no matter whether whether this uh comes in or not, we've got a lot of things we have to get done on conservation and other things. So, I'm going to uh after that one diet tribe, I'm going to be voting in favor of this. Tom, yeah. Basically, what I'm going to do is to emphasize some of the things that the mayor has said. We have one problem. We need water. But there are many solutions and we are going to look at quite a wide variety of solutions. We've had discussions already.

We will do as much of this as we can as transparent to the public. Some things have to be done in executive session, but informing the public of what's happening to the extent that we can. Uh we really need to do that and make this a matter of a community discussion. Okay. Uh we'll start down here and move this way. destination you're taking. So, I'm not going to in response to some of the some of the the statements that were made, we've already been exploring a number of options.

The problem is the options are limited. They're short-term. Long-term, the state's in trouble. The entire state, not just the town of Cave Creek. If you take a look at the towns and cities in this state, everybody's in the same boat. Tucson is 100% relying on cap water. They're going to take a big hit. Scottsdale 60 to 80% per year depending on the year. It also we have to take into account and the reason we're looking at all the options and we haven't made our mind up this way or that way.

How do you compete with somebody who has a property tax that can raise billions of dollars to go get water where Cave Creek? Would you like to I mean, can we legitimately raise water bills two to three times what they are currently and still expect to be survivable as a town? Water is going to become extremely expensive. the numbers that uh people, you know, when they come in and quote, they're more than than uh quite as quite significantly higher than things that we've seen in the past.

Uh by like an order of magnitude. The state has a problem and we are a microcosm of that problem. We're going to be the first of many that are going to have these problems. So, we have to do our due diligence to see what alternatives are out there. and we haven't made up our mind yet as to which one we're going to go with. So, at this point, we're exploring all of our options to see which one works for the town. I'm going to agree with everything that's been said so far.

And also keep in mind that the state gets 80% of their water from the cap, which means 20% is coming from wells and so forth. And I've heard people say, "Well, I've got a well." Well, you know, if things really did fall apart, which they're not going to, well, would the infrastructure would go down too, so you can have your well. So, this is a problem that everybody shares in the whole state. We are going to do exactly what he said. We are going to look at all the options.

We're not just going to jump and throw our cards in right away. And that's really there's not a lot to say about it. You've heard everything today. We're going to look at all of our options before we make any decisions going forward. Vice Mayor, I'd just like to get some statistics thrown out here for a moment so people have a concept of how expensive acquiring water is going to be because that's the answer to why now? Why why are we thinking about selling uh the water company?

It's not that we really can't afford the expenses today. It's the future. For instance, uh Sean, what are we paying per acref foot with cap? Vice Mayor Council, I think the current rate is just under $400 per acre foot right now. So, our annual rate and I expect that to go up next year. The projection are to go up. Yes, it's projected both for next year, 27 and 28.

When we were in the process of uh thinking about acquiring Harka Valley Water, we were going to pay $22,500 per acref foot compared to $400 an acre foot for CAP. So that gives you an idea of the enormity of the difference in expenses that we'll be facing to try to acquire new water supplies. Um and it's just going to go up. This, you know, the Harka Valley deal was already a few months old. So, uh we have a severe uh decision in the near future to make on how we're going to do it all.

Um and there's there's still more um work that needs to be done on our own system, our wastewater treatment plant. We're looking at a $10 million improvement in the next few years to move the pole systems inside rather than outside. So there's enormous expenses and as somebody mentioned, the economies of scale are so limited for Cave Creek since we only have, you know, 4,400 water customers. Uh, and all of that needs to be recognized. When you ask why, this is why. This is why. Thank you.

Thank you, mayor. Uh first, thanks to all the community members who commented and shared their ideas, both background ideas as well as current thoughts about decisions on the water company. You know, last year we the town did invest uh time and money in understanding the water options through Harkua, what it would cost us, what the timing could be, and we learned a lot from that exercise.

So I see this option of going forward with more information both in terms of what is the value of um our water company and wastewater company as well as where do we fit in the big picture of other providers.

Uh so by keeping that analysis going, we will definitely have more information to make an informed decision both as it impacts um Cave Creek residents uh both water users and non because it does pull into effect use of our general funds as well as our neighbors in Desert Hills who are impacted by a different provider if that becomes a choice as well. Uh so I really appreciate the public input and want to keep hearing from all of you. Dom. Uh, thank you.

Um, some of you here on the council were present and I think it was two or three weeks ago at the library when the general outside council for the Arizona Department of Water Resources came in and gave a presentation. Rita Pearson, who herself is a former director of that agency.

And um God, I wish we could have had her tonight and had her make the presentation because we always had seven of us attempting to talk about an issue which is probably above everybody's pay grade that's much more complex and it changes daily and so forth and and the whole surreal premise that water can be on paper as well as liquid is uniquely Arizonans but no less no less troubling. Um I would suggest Mr.

that maybe uh before the summer starts it would be really an insightful opportunity to ask Rita Pearson, Rita Maguire to come up here for a session either in combination of another meeting or special to provide the ability for the community to ask questions directly of her which they did that night at the library.

the the library group kind of scooped the town, but it was um it was a rare evening where uh the setting was intimate in terms of the crowd was probably under 50 and you could ask questions of her at the end and she was there to give a forecast which I think everybody there gulped at when they heard it but it seemed to summarize and it seemed to focus on the brutal reality of what we've spent so long talking about not tonight but over the history of water in this community starting with the original acquisition of the water company.

So I I just would suggest if it's feasible to have her come up and be part of an agenda or come up and take questions if maybe there's not time for a full presentation perhaps she could update the council or take written questions in the audience related to where the state and the town is at that time. But it was an amazing access to a resource that we otherwise, you know, have not availed ourselves.

And I felt like I was getting an inside seat at a table that we as a town otherwise would have no access to. So I clearly support the motion that you're doing this evening that you've offered. But um God, I wish we could get that level of expertise, history, and understanding on the front line with the people that live in the community so they would understand that there truly is no water, wet water, paper water.

There is a lot of machinations with moving everything and there's promises and commitments and plans and policies and so forth. And uh I just think that coming from the agency, we might get more precise information by early summer than what we're able to advocate for this evening. So that's just a suggestion, Mr. Mayor. But I support the motion clearly. Uh well, we're having CAP will be Yeah. here tomorrow, right?

And we we've had the head of the president of CAP and we met with the director also. So those things have been happening. Okay. Um so with that uh we made the motion. It's been seconded. We've had our questions. So all those in favor of this signify by saying I. I. Opposed. Motion carries 70. Uh that's the only thing on the agenda. If there are no objections, we will adjourn. Meeting a jerk.