Cave Creek AZ Water Service After 2026: Rates and Sale Plans

The cover page reads "Sale of the Desert Hills Water System, the Cave Creek Water System, and the Cave Creek Wastewater System." The Town of Cave Creek issued it on July 10, 2026. Bids were due September 10, and an optional pre-bid meeting was held August 3. The number of bids and the bidders' names did not appear in any public Town material reviewed for this post. Under the invitation, bids stay confidential while they are being evaluated and until an award is announced.

Most guides cover Cave Creek's views, lot sizes and trailheads. They skip the fact that two homes a few miles apart can come with different monthly base charges, different connection fees and, in some places, no Town connection at all. In 2026 the larger open question is who will run the system at all. Water has always come with the parcel here. This year it belongs on the due diligence list before you make an offer.

Two systems with two rate schedules

The Town runs two water systems. Cave Creek Water serves the town. Desert Hills Water serves an unincorporated area outside town limits, with roughly 1,840 accounts and three groundwater wells in operation, according to the July solicitation. On January 6, 2026, Council adopted an average 6% rate increase that took effect February 5, 2026. The same resolution already sets the 2027 and 2028 rates, which start with the first full January billing period of each year.

The top tier matters most for the homes this market is known for. In Cave Creek Water's 2026 schedule, the residential price per 1,000 gallons rises from $2.80 to $3.50, then $5.08, $7.36 and $11.41 before reaching $20.53 above 40,000 gallons. A household on a large lot with a pool and irrigated landscaping uses more water than a lock-and-leave home, and it pays a much higher rate on that extra use. A meter labeled "boosted" also costs more in Cave Creek: $80.75 a month in 2026 for the same meter size.

The schedule may also change. A July 22, 2026 draft from the Water Advisory Committee recommended higher prices for use above 10,000 gallons, with the extra revenue going toward short- and long-term water supply. Council has not adopted it. At a September 2, 2026 Utilities Advisory Committee meeting, staff recommended updating capacity and water-resource fees. That matters to anyone buying a lot who still has to pay to connect.

The 2021 policy that limits who can connect

The rate gap explains only part of it. Under the Town's 2021 Water Resource Policy, Cave Creek no longer extends new service outside its limits. Town bid documents tie the policy to falling groundwater in Desert Hills and heavier reliance on Cave Creek's CAP allocation, and they note the Town has turned down service requests since.

Bulk water shows how much has changed. Some properties near the Desert Hills lines once hauled water from a Town standpipe. Twelve accounts were active when the policy took effect. The Town then stopped taking new bulk customers, and most remaining users closed their accounts because they owed the monthly base fee whether they drew water or not. Two active accounts remain. Customers have to schedule 24 hours ahead, and the standpipe is open only on weekdays during business hours.

A second standpipe, at the treatment facility at 44th Street and Carefree Highway, is covered by an agreement with West Cave Creek Water LLC. It serves a defined area north of Tanya Road, east of the 24th Street alignment, south of Rockaway Hills Road and west of the 34th Street alignment. The Town created it in 2017 as a temporary arrangement until a 12-inch line built for Cahava Springs could be activated and the owners could form a Domestic Water Improvement District. Cahava stopped in 2019, so the line was never activated, and only WCCW property owners may use the standpipe. The Town has agreed to supply up to 45 acre-feet a year to that group. Metered delivery depends on forming the district and building the infrastructure.

Some parcels already hold water commitments. In Desert Hills, the undeveloped Desert Hills Ranch subdivision has 51 lots and Cielo Grande has 73. Both have Certificates of Assured Water Supply, and the Town of Cave Creek says whoever buys the utility would take on those service obligations. ADWR's rules separate a subdivision's certificate or a provider's commitment from whether a particular parcel can actually connect.

Why the Town is considering a sale

The Town says Cave Creek gets nearly 95% of its drinking water from the Colorado River through the Central Arizona Project, and it expects CAP deliveries to municipal users to be cut by 20% to 57% in 2027. Its Utility Master Plan calls for another 1,000 acre-feet a year on top of its current 2,000 acre-feet of CAP water.

Council has tried several ways to close that gap this year:

1. Groundwater purchase, rejected. On October 21, 2025, Council approved an agreement to buy 500 acre-feet a year of Harquahala groundwater for 100 years. It voted unanimously not to go forward with it in January 2026.
2. Peoria exchange, approved. On June 23, 2026, Council approved an agreement with Peoria for up to 450 acre-feet a year over seven years. Cave Creek trades its long-term storage credits for CAP water that Peoria receives. The Town gives 1.1 acre-feet of credits for each acre-foot delivered and pays a recovery fee that starts at $460 per acre-foot and rises 3% a year.
3. Surprise exchange and local wells, not finalized. The Town reported progress in talks with Surprise and plans to bring one or more Cave Creek wells online within three to five years, according to its March 25 release. No approved Surprise agreement turned up in the sources reviewed for this post.
4. Sale bids, under review. The Town first sought bids for Desert Hills alone in December, reasoning it could keep the roughly 550 acre-feet of CAP water that now goes to that area. On March 25, 2026, Council voted unanimously to open bidding to all three systems and hired Raftelis for $114,000 to appraise the assets and compare selling with keeping them.

Under the Town of Cave Creek's expanded invitation, a buyer could take over the Town's CAP subcontract rights and any of its more than 3,000 acre-feet of long-term storage credits still unused at closing. Those credits are what the Peoria deal draws on. The sale and the supply strategy are linked decisions.

What happens next

Bidding does not commit the Town to selling. If the real property in the three utilities appraises at $15 million or more, a sale needs voter approval at a special election in 2027. Below that amount, it goes to a public hearing and a Council resolution. The Town can decline to sell at any point before it signs a sale agreement. The March release said Raftelis would report to Council in the fall. A regular Council meeting is set for October 6, but its published listing does not show whether the sale is on the agenda.

A sale would change some practical details. A new owner could end Desert Hills standpipe service after giving proper notice, according to the Town of Cave Creek. South of Carefree Highway, the City of Phoenix was scheduled to take over domestic and fire water service by early September 2026. At that point Cave Creek was serving only three commercial properties there. According to a summary of the September 15 Council meeting, startup of the Phoenix interconnect was running two to three weeks late because broken valves had to be replaced.

Questions to settle before closing

These questions work best during the inspection period, when you still have time to get answers:

• Which system serves the parcel? Cave Creek Water and Desert Hills Water have different base charges and tiers, as the table shows; capacity charges may differ too.
• What meter is installed, and is it boosted? Both affect the monthly base charge.
• For a lot, what is the connection cost now, and could it change? The Town is reviewing capacity charges.
• If a well serves the property, what is recorded? ADWR does not regulate shared-well agreements and says recorded agreements are filed with the County Recorder. Its online well registry can be searched by parcel number, but a well is registered to the parcel where it physically sits, which may not be the parcel you are buying.
• Will a new or deeper well be needed? Drilling a new well or deepening an existing one requires a Notice of Intent to Drill and a licensed contractor. An exempt domestic well usually pumps 35 gallons per minute or less.

None of this is legal or financial advice. These are facts to confirm with the utility, the title company and your own advisors.

FAQ

Has Cave Creek sold its water utility? Not as far as public records show. Bids closed September 10, 2026. No bidder, recommendation or Council decision appeared in the Town materials reviewed for this post, and the Town keeps the right to hold on to the systems until it signs a sale agreement.

Will 2027 water rates go up? Yes. The 2027 rates are already adopted. The Cave Creek Water base charge rises to $68.94 and the Desert Hills base charge to $85.61 for a standard meter, starting with the first full January billing period.

Can a property outside town limits get new Town water service? Under the 2021 Water Resource Policy, the Town limits new service outside its limits and has turned down requests.

Would residents vote on a sale? Only if the utilities' real property appraises at $15 million or more. Then a special election would be held in 2027.

For land and custom-home buyers, a Cave Creek water connection affects the budget as much as grading or design does, and the rules are under active review. John Zook can help you confirm which system serves a parcel, what it will cost to connect, and what is still pending at Town Hall before you commit. Let's Connect.