The Town of Cave Creek scheduled Cave Creek Road to narrow to one lane in each direction beginning Monday, Oct. 26. The work zone sits on the west side of the road just north of Carefree Highway, where a contractor is modifying a 16-inch waterline at the new Phoenix interconnect site. The Town of Cave Creek calls the work one of the last steps before it expects to start receiving treated Phoenix water in early November. The lane restriction is expected to last about two weeks.
The town has also invited bids from outside companies to buy its whole water and wastewater operation. And the town water system serves well under half of the town. Two horse properties a mile apart can share a Cave Creek mailing address and still get their water from entirely different places. This fall's changes reach some of those places and leave others untouched.
The Map Behind the Address
The Town of Cave Creek covers 37.6 square miles. Its water system serves about 14.5 of them, including a half-square-mile area east of 24th Street. In the town's own words, "there are many homes and businesses with private wells that are not connected to the Town's water system."
The town actually runs two separate drinking water systems plus a sewer system, and each one serves a different slice of the area. The town's July 2026 Invitation for Bids describes them this way:
| Water source | Who it serves | Where the water comes from | What changes this fall |
|---|---|---|---|
| Cave Creek Water System | 2,574 metered accounts inside town limits and nearby unincorporated areas | CAP surface water, treated at the town's 3 MGD plant | Phoenix interconnect expected online in early November; system is up for sale |
| Desert Hills Water System | About 1,840 accounts, all outside town limits | Groundwater from three wells, supplemented by town CAP water through an existing interconnect | System is up for sale |
| Town standpipe, West Cave Creek Water | 17 active hauled-water accounts as of June 2026 | Town potable water from a bulk fill station at 44th Street and Carefree Highway | Bundled into the Cave Creek Water System sale |
| Private wells | Many homes and businesses throughout town | On-site groundwater | Not part of the sale |
Wastewater follows its own map. The Cave Creek Wastewater System has 947 accounts, all inside town limits, and its treatment plant at 44th Street and Carefree Highway sends A+ reclaimed water through a 4.7-mile pipeline to the Rancho Mañana golf course. The system has fewer than 1,000 sewer accounts against more than 2,500 water accounts. That means many homes on town water still handle wastewater on their own property.
When someone calls a property "on Cave Creek water," it could mean any of the four rows in that table. Each row comes with its own costs, its own supply risks and its own outlook.
Why the Town System Needed a Second Pipe
Before the interconnect, the entire Cave Creek Water System hung on one line. Raw water leaves the Central Arizona Project canal at Deer Valley Road in Phoenix and climbs about 600 feet over more than 12 miles. Four in-line booster stations push it up to the treatment plant. When the town first sought a contractor in 2022, it said the Phoenix connection would let it schedule maintenance on that pipeline and plant during low-demand periods. The single-line setup did not allow that. The new connection would supply up to 1.4 million gallons a day, about half of the system's peak-day demand.
Mayor Robert Morris was blunter in an interview with the Foothills Focus:
"What are you going to do if water is out for two weeks? This project was originally put in to address that issue."
The same Foothills Focus report put the project at nearly $20 million. It quoted Morris saying the cost was "already built into rates," with the town borrowing to spread it over 30 years. He also said water rates were likely to rise for other reasons. On Jan. 6, 2026, the Town Council approved a 6% rate increase for each of the next three years for Cave Creek water, Desert Hills water and wastewater customers.
The second pipe makes delivery more reliable. It does not add water. Phoenix treats Cave Creek's own CAP allocation and sends it back, so the water still comes from the Colorado River.
The Supply Problem the Pipe Doesn't Solve
KJZZ reported in April 2026 that Cave Creek gets about 95% of its water from the Colorado River through the CAP canal, and that it "will be among the first to feel the impact" of proposed federal cutbacks. The Foothills Focus reported that Terry Goddard, president of the Central Arizona Water Conservation District, presented projections to the Town Council. Under those projections, Cave Creek's yearly allocation could be reduced by 25% to 35% if the river negotiations fail to produce an agreement.
The town's budget prices this in. For fiscal year 2027, which runs July 1, 2026 through June 30, 2027, the Cave Creek Water System expects about $6.5 million in revenue. Its capital program is nearly $17.9 million, and $12.1 million of that is a placeholder for new water resources. The town is also testing its old wells. The system's eight well sites are all inactive. Three wells near the Town Core tested in 2024 and 2025 met potable standards, though they historically had elevated arsenic. One option under study is sending that water to the golf course for irrigation.
The Desert Hills system faces the opposite problem. The town describes it as "dependent on a decreasing groundwater supply and has no other water supplies." Treated CAP water from Cave Creek already supplements it through an existing interconnect. One system runs short on river water and the other runs short on groundwater, and each leans on the other. That shared exposure is a big part of why the town is testing what an outside owner would pay.
How a Desert Hills Sale Became a Sale of Everything
The idea started smaller. Ahead of a March 2026 special meeting, the Cave Creek/Carefree Independent described a plan to sell only the Desert Hills system and keep about 550 acre-feet of CAP water. The paper reported that the town needed roughly 1,000 more acre-feet a year. The Council sought to retain Raftelis to appraise the assets, analyze bids and compare keeping the utilities with selling them. At that meeting, the Council unanimously voted to widen the scope to all three systems. The Independent also reported Morris's skepticism. He said municipalities usually buy utilities rather than sell them, and he believed Cave Creek could run its own system well.
Here is the sequence since then:
- July 10, 2026. The town issues an Invitation for Bids. Bidders must bid on all three systems together.
- Sept. 10, 2026. Bids are due.
- Sept. 15, 2026. A speaker in public comment urges the Council to reject a sale, citing $41 million in Town reserves.
- Oct. 20, 2026. The Council agenda includes no utility-sale item.
- 2027, if triggered. If the utilities' real property appraises at $15 million or more, a sale needs voter approval at a special election, followed by an open auction at no less than appraised value. Below $15 million, the Council can approve a sale by resolution after a public hearing.
The bid document lays out that process in its own text, citing A.R.S. §§ 9-402 and 9-403. The election step applies to town voters. The Desert Hills system and its roughly 1,840 accounts sit outside town limits.
What a Buyer of the Utility Would Have to Agree To
The bid document sets the terms an outside owner would inherit. The town's stated goals are to get the highest value, reduce the town's need to acquire new water resources, and reduce future rate increases. The buyer would also take on:
- The town's CAP subcontract rights, plus more than 3,000 acre-feet of long-term storage credits at the Agua Fria and Hieroglyphic Mountain recharge sites, to the extent those credits are not used before closing.
- The job of getting Arizona Corporation Commission approval of the sale.
- A required plan for rate structures after the sale.
- An obligation to keep the town's existing utility operations staff for at least 12 months after closing.
Today the Town Council sets these rates, as it did with the January increase. A private buyer would first need Commission approval of the sale itself. Carefree offers a current example of a Commission rate request. Its wastewater provider, Liberty Utilities, has asked the Commission for a 46.79% increase, which Liberty estimates would add $41.31 a month to an average residential bill. The request had not been approved as of Carefree's Oct. 19 notice.
Where the Pipes Are Still Being Extended
Some parts of town are still waiting to join the system. West Cave Creek Water is a group of 17 property owners north of Tanya Road, east of the 24th Street alignment, south of Rockaway Hills Road and west of 34th Street. They haul water from the town standpipe. The town has agreed to provide them up to 45 acre-feet a year, through the standpipe or through meters once they form a Domestic Water Improvement District and build improvements. The 230-lot Cahava Springs subdivision will be constructing off-site booster stations from 24th Street and Joy Ranch Road. Once those are active, an existing residential area along 24th Street is set to form its own district to connect to the new 12-inch line. Those agreements were made with the town. In public comment at the Sept. 1 meeting, a representative of West Cave Creek Water LLC warned that a sale could affect west-side residents waiting to join the system, along with existing district agreements.
Quick Answers
Does the Phoenix interconnect mean Cave Creek has more water?
No. Phoenix treats part of Cave Creek's own CAP allocation and returns it. The interconnect adds a second delivery route of up to 1.4 million gallons a day. It does not add to the supply.
Who bid on the utilities?
Bidder names and prices did not appear on the Council's Oct. 20, 2026 agenda, which listed no utility-sale item.
Does the sale affect a property on a private well?
Private wells are not among the assets listed for sale. The listed assets are the Desert Hills and Cave Creek water systems and the Cave Creek wastewater system.
When could ownership actually change?
If the utility real property appraises at $15 million or more, not before a 2027 special election and Corporation Commission approval of the sale.
This post is general information, not legal or financial advice. Confirm a specific parcel's water source, service terms and obligations with the provider, the Town of Cave Creek and your own advisors.
On acreage in Cave Creek, the water source is the first thing to establish for any parcel, before the barn or the arena. If you own land here or are weighing a parcel, Clinton Miller can help you pin down which system serves it and what is changing for that system this year. Request a confidential consultation.
