Carefree Truth
Issue #669, July 20, 2018
Mayor Les Peterson introduced the members of the Water Committee who were in attendance. Planning & Zoning Vice Chairman Tom Cross has a background in construction and engineering, and has dealt with a number of water and wastewater systems. Past Vice Mayor Lloyd Meyer was involved with purchasing and setting up the Carefree Water Company (CFWC), and would talk about history. Town Administrator Gary Neiss has been heavily involved in the day to day business of the Town for 16 years. Tony Geiger spent 35 years in the water and wastewater business. He represented Carefree on Cave Creek's Water Advisory Committee (WAC) for 4 years, was the Chairman for the last 2 of those 4 years, and would talk about the current status of the Cave Creek Water Company (CCWC).
Water Committee members Greg Crossman, Vice Mayor John Crane and Councilman Stephen Hatcher were out of town and unable to attend this meeting. Mr. Crossman, the General Manager of the CFWC, is a registered engineer and is the Town engineer. Vice Mayor Crane, who has an engineering and mathmatics background, has been heavily involved. Councilman Hatcher has an engineering background and works in financial services, which will be valuable when determining funding for the project.
The Project Manager for the consultant team from Coe, Van Loo is Eric Laurin, PE. He will provide a system evaluation and a cost estimate. Condition assessment is being performed by Tracy Grunden, PE, B&N. Dan Jackson, from Willdan, will do the financial assessment. Michael Pearce, who specializes in utilities, is the water attorney.
The Mayor said questions from the audience would be taken after the speakers had finished. He asked that people write their questions on the forms available at the front of the room.
Mayor Peterson noted that we are in the midst of a drought that was forecasted to last 20-30 years, but experts are now saying it could last 35-50 years. No one will really know until it's over. Fire departments in Northern Arizona have increased the rating from Extreme Danger to Extraordinary Danger, and are extremely concerned.
There are 3 water sources in Arizona. One is the aquifers below us, and surface water. Rain, like we were having the day of the meeting, mostly rolls down to the Salt River and goes down to Yuma. It does little to sustain us, beyond watering the plants. Luckily, we are sitting above a huge aquifer that lies 1700' below Carefree and north Scottsdale, with a shallower section below Cave Creek. Watering a single golf course requires 140-150 million gallons a year. Desert Mountain used to draw water from it to water 6 golf courses. The aquifer started to drop. This was halted in the late 1990s and a recharge effort began. The aquifer has come up approximately 100' due to this effort.
The second source is the Salt River Project (SRP) which gets water from the Show Low watershed area in northern Arizona. 11 municipalities, including Scottsdale, receive water from SRP, which comes through the east Valley. The third is the Central Arizona Project (CAP), which gets water from the upper basin states like Colorado and Utah. This water drains through the Colorado River to Yuma. It benefits us more when it rains in southern Colorado and southeastern Utah than when it rains here. CAP supplies water to 6 million of the 7 million people in Arizona. It's a tremendous source. Carefree draws half of it's water from the aquifer and gets the other half from CAP. Cave Creek has a single source, which is CAP. But there are clouds looming in the future.
Conflicting laws govern water in the U.S., English law and Spanish law. England has ample rain, and rivers always flow. It is an endless source, and those near the rivers can access it without restrictions. This is called riparian water rights. Spanish law irrigates dry areas. Those upriver can't take water from those downriver. Those closest to the source have first rights. CAP utilizes this approach. The hierarchy goes by time and quantity of original use. If the usage drops, so does the allocation. In Arizona, the farmers in Yuma are first, then the Indian reservations. Next are Municipalities and Industry (M&I). The bulk of the use is agricultural. During times of shortage, the most junior users get cut back first. While M&I is fairly senior, it is not immune.
Lake Mead is now 1075' above sea level. When it drops below that, other regulations kick in and accelerate as it drops. The lake is V shaped, so from 1074' to 1073' is fewer gallons than from 1080' to 1079'. If it drops to 1000', even more stringent regulations become activated. It matters if the administration in Washington, D.C. is Democrat or Republican. The 500 pound gorilla in the room is California, which has conflicting laws and is heavily Democrat. If the administration in D.C. is Democrat, California gets more support from the Secretary of the Interior, which must be recognized and taken into account.
There is also the concept of "wet water" and "dry water". If you turn on your tap and water comes out, there is water where you are, known as "wet water". If you own acre feet in Yuma, that is called "dry water" because you have to get it here via a pipeline that you either build or lease. The Carefree/N. Scottsdale aquifer is wet water. Cave Creek Water's sole source, CAP, is dry water.
Before Carefree and Cave Creek were incorporated, both functioned under the County jurisdiction. The water companies were private privately owned and the Arizona Corporation Commission (ACC) determined the service areas for each. Private utility companies are under the purview of the ACC and must go to them when requesting a rate hike. The ACC has a staff of lawyers and forensic accountants who evaluate the request and make recommendations to the Commissioners. This process takes approximately 1 year. The State Legislature formed the Residential Utility Consumer Office (RUCO), which defends residents.
CFWC and CCWC were subsequently purchased by the respective Towns, but the service areas remained the same. If residents have an issue with municipal utilities, they can come to the City/Town Council for redress, and the municipality can make changes. If there is an overlap of boundaries, as is the case with the Carefree and Cave Creek Water Companies, those Carefree residents serviced by CCW can't come to the Carefree Council for redress; they must go to the Cave Creek Council, whose function it is to look after the citizens of Cave Creek.
Water is the lifeblood of the desert southwest, impacting property values, quality of life and enjoyment, and must be managed accordingly. As Carefree elected officials, Mayor Peterson said it is their fiduciary duty responsibility to ensure that ALL residents and businesses have a reliable water supply. The elements defining this include an immediate and long term assured water supply, the utilization of best maintenance practices, and redundancy/back-up connections. CFWC runs like clockwork and is well maintained. It has 3 inlets from the CAP system, 2 from Scottsdale and 1 from Cave Creek. CCW has only 1. CFWC has loop systems that can service various neighborhoods.
Why is Carefree looking at this now? Over the past 4+ years, a significant amount of work has been undertaken by the Cave Creek Water Advisory Committee (WAC) to outline options for the Cave Creek Council to help stabilize their water system. WAC looked at rates, the system structure, redundancy, and "straws" (the ways that water is drawn from the sources), as well as steps taken.
There are a number of structural elements standing in the way of solutions. As Cave Creek water issues have been publicly vetted, there has been a lack of continuity in Cave Creek leadership, with 3 Town managers and 3 Utility managers, to strategically and timely address the complexities of water infrastructure. The underfunded utility with high debt service has resulted in a growing divide in the lack of investment in a fragile water system.
Over the past 12 months, Carefree's concerns have increased. The ongoing drought has intensified. Annual fire hydrant inspections have been delayed/neglected. Conflicts in historical data regarding quantities of water supply have been discussed, raising concerns over water shortages as the drought worsens. This past winter and spring, significant water rate increases (up to a $30 base rate increase for 1" meters) have been discussed to help address the under funding of the water distribution system. And more recently, the Water Utility manager has identified concerns regarding the 3 pumps which support the transportation of Cave Creek's CAP water, its only water supply connection.
Mayor Peterson has worked in marketing and consulting. One looks for 2 elements in a well run company. The first is long term good people who have built an experience base, who know what has been tried and what did and didn't work. There have been multiple turn-overs in managerial positions in Cave Creek. The second is thorough record keeping. What's in the ground there? What are the rates, the cost of goods, and what is the selling price of those goods? Cave Creek has a problem in both of those areas. They have changed staff, and they can't find the records. "Perhaps God knows what's in the ground, but they don't and we don't."
Some of the pipelines have 3 different kinds of materials because that's what the original contractor had in stock. Normally, butterfly valves that open and close are used to prevent backflow on uphill pipes. These don't last long term.
Cave Creek's underfunded water and sewer utilities with high debt services are part of the Town budget and they form the bulk of the Town expenses. The sewer plant cost $40 million dollars to build and is running at 30% of its capacity. There has not been a water rate increase in 8 years and there were considerable debates this past fall and winter over a potential base rate increase of $30 a month. The utilities have been losing money every year. That is coming out of Cave Creek's General Fund.
Tony Geiger and Ralph Ferro, the other WAC member representing Carefree, have been talking to Carefree for the past 12 months about the problems and asking Carefree to get involved. Carefree attempted to give Cave Creek the opportunity to solve the problems, but Cave Creek has not been forthcoming with solutions. The Mayor was speaking candidly because he felt the people deserved a candid assessment from a group of people, the Water Committee, with no ax to grind. Carefree is trying to solve the problem.
In the last 12 months, the drought has intensified. No CAP cut backs are anticipated for 1-2 years, but after that, all bets are off. Cave Creek is 100% dependent on CAP for their water supply. "Best practice" dictates annual fire hydrant inspections. To test them they must be run, the valves opened, and 1000 gallons of water blown through them to clear sediment from the lines and exercise what's in that system. Some of the hydrants on the Cave Creek system have not been tested for 2-1/2 years. If there is a house fire and the valves don't open because they are locked, that's not acceptable. Carefree has had pitched battles with Cave Creek over that.
Cave Creek has a 2606 acre feet of CAP water allocation and currently utilizes approximately 2100 acre feet. A developer wanting to build a subdivision must receive a "Will Serve" letter from the area water provider, guaranteeing water service for 100 years. Unfortunately, accurate records were not kept of Cave Creek Water's Will Serve letters. They don't know the outstanding number of Will Serve letters, which will go against their allocation. Cave Creek acquired the Desert Hills Water Company (DFWC), which takes some of the CCW CAP allocation. DFWC also has an unknown quantity of outstanding Will Serve letters.
CCW receives its CAP water via a pipeline that originates in Deer Valley and comes 12 miles up Cave Creek Road. 3 pumps move the water along the pipeline as the elevation increases. If just one pump breaks down, the flow stops. CCW has a single storage tank with a 1 day supply of water. Replacing a pump can take days. Replacing the aging pumps and/or having a replacement pump available is another recommendation from the WAC that is sitting in a pile. The water situation has become precarious and puts customers at risk. "We're here to protect Carefree citizens." It may cost money but that's better than not having water, having impure water, or having a system that is broken down.
What can be done to ensure a reliable water system and accountability in response to those concerns? Carefree has the right to condemn and acquire that part of the system which services those homes and businesses in Carefree. As a result of these evolving concerns, last fall the Carefree Water Committee developed a scope of work to hire a consultant team, and a Request for Proposal was issued last winter. This past spring, the Town hired engineers to evaluate the state of the water infrastructure. The engineering study is now evaluating the situation. The study is expected to be completed by the end of December.
https://vimeo.com/279498069
Lyn Hitchon
Prepared by Carefree Truth
Visit our website at www.carefreetruth2.com If you know anyone who would like to be added to the Carefree Truth email list, please have them contact me. Feel free to share Carefree Truth with others on your list.
Visit www.carefreeazbusinesses.com to see more info about businesses in Carefree. Please support our merchants.